Table 10 -1. Capital Budgeting Choices

question 5

Multiple Choice

Table 10 -1. Capital Budgeting Choices

-Refer to Table 10 -1. Glen Write owns an engineering firm. He asked his employees for suggestions regarding equipment they thought the firm would need during the next year. They suggested the purchase of eight pieces of equipment. Glen calculated the net present value of each recommendation. Glen estimates that he will have no more than $400,000 to invest next year. Based on NPV, which of the following items should he purchase?

• A) 1, 2, 3, 4, 5, 7, & 8
• B) 1, 2, 4, 5, 6, & 7
• C) 1, 2, 3, 4, 5, 6, & 8
• D) 1, 2, 3, 4, 7, & 8

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Definitions:

Channel Conflict

This arises when different sales channels (such as online and brick-and-mortar stores) for the same product compete with each other, potentially undermining sales or brand coherence.

Horizontal

Relating to the expansion or operation across the same level or stage in the supply chain, industry, or market, often involving partnerships or mergers.

Vertical

Pertains to a market or industry structure where the production process, from raw materials to final product delivery, is integrated within a single company or closely controlled through a chain of ownership.

Wholesaler

A wholesaler is a person or company that sells goods in large quantities at lower prices to retailers, rather than selling them directly to consumers.