In Which of the Following Situations Would It Not Be

question 6

Multiple Choice

In which of the following situations would it not be useful to apply the concepts and techniques used in capital investment decisions?

• A) A company is considering the purchase of a new machine that would reduce the cost of direct labour in the production process.
• B) A company is comparing the profitability and capital investments of two district offices to determine which one has the best current return on investment.
• C) A company is reviewing the past performance of two investment projects to determine which project had the best five-year return on the investment made.
• D) A company is evaluating the potential investment in research and development expenses to develop a new product line.

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Definitions:

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that traditionally were performed in-house by the company's own employees.

Network Organization

Liaisons between specialist organizations that rely strongly on market mechanisms for coordination.

Coordination

The management of dependencies between activities.

Span

Often used in the context of "span of control," referring to the number of subordinates that a manager or leader can effectively oversee.