Which of the Following should Be Considered When a Company

question 18

Multiple Choice

Which of the following should be considered when a company estimates the cash flows used to analyze a proposed project?

• A) The new project is expected to reduce sales of one of the company’s existing products by 5%.
• B) Since the firm’s director of capital budgeting spent some of her time last year to evaluate the new project, a portion of her salary for that year should be charged to the project’s initial cost.
• C) The company has spent and expensed $1 million on R&D associated with the new project.
• D) The company spent and expensed $10 million on a marketing study before its current analysis regarding whether to accept or reject the project.
• E) The firm would borrow all the money used to finance the new project, and the interest on this debt would be $1.5 million per year.

---

Definitions:

Behavioral Norms

The accepted, standard behaviors and attitudes that are expected within a group or society.

Individual Contributions

The unique inputs or efforts provided by each person within a group or organization, contributing to the achievement of collective goals or outcomes.

Cooperative Behaviors

Actions that involve working together in a supportive manner to achieve a common or mutual benefit.

Work Teams

Groups of individuals working collaboratively towards a common goal, leveraging diverse skills and expertise for collective success.