Thompson & Son Has Been Busy Analyzing a New Product

question 74

Multiple Choice

Thompson & Son has been busy analyzing a new product.It has determined that an operating cash flow of €16,700 will result in a zero net present value, which is a company requirement for project
Acceptance.The fixed costs are €12,378 and the contribution margin is €6.20.The company feels
That it can realistically capture 10% of the 50,000 unit market for this product.Should the company
Develop the new product? Why or why not?

• A)Yes; because 5,000 units of sales exceeds the quantity required for a zero net present
• Value
• B)Yes; because the internal break-even point is less than 5,000 units
• C)No; because the firm can not generate sufficient sales to obtain at least a zero net present
• Value
• D)No; because the project has an expected internal rate of return of negative 100%
• E)No; because the project will not pay back on a discounted basis

Understand the legal implications of unauthorized endorsements and who is liable in such situations.

Comprehend liability and discharge in the context of negotiable instruments.

Analyze the role of good faith and due diligence in liability scenarios involving checks and notes.

Evaluate the distinction between ordinary holders, HDCs (Holder in Due Course), and their rights and liabilities.

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Definitions:

Setting Standards

The process of establishing criteria or benchmarks that define expected levels of performance, quality, or conduct.

Corrective Action

Measures taken to fix a problem or nonconformity and to prevent its recurrence.

Controls

Mechanisms or regulations put in place to guide actions or processes towards desired outcomes in an organization.

Flexibility and Creativity

Flexibility and creativity are qualities that allow individuals or organizations to adapt to change and generate innovative solutions to problems.