Selecting the Lowest Cost Technology

question 121

Multiple Choice

Selecting the lowest cost technology:

• A)will result in the highest long-run NPV.
• B)could rule out future flexibility.
• C)will minimize the cost of future upgrades.
• D)may not permit future expansion.

---

Definitions:

Current Liabilities

Financial obligations a company is expected to settle within one year or within its operating cycle, whichever is longer.

Current Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with short-term assets.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate sales revenue, calculated by dividing sales revenue by total assets.

Noncurrent Assets

Assets not expected to be converted into cash within one year or the operating cycle, including property, plant, and equipment.