In Order for a Manager to Correctly Decide to Postpone

question 61

Multiple Choice

In order for a manager to correctly decide to postpone an investment until one year into the future, the NPV of the investment should:

• A)grow more rapidly than the IRR.
• B)grow more rapidly than the cost of capital.
• C)not decrease.
• D)remain stable.

Comprehend the relationship between output levels and average/marginal costs.

Grasp the idea of economies and diseconomies of scope.

Appreciate the significance of returns to scale on long-run costs.

Recognize the role of technology and specialization in achieving economies of scale.

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