A Firm Should Make an Investment Only If

question 230

Multiple Choice

A firm should make an investment only if

• A)it is profitable in every year.
• B)the present value of the profits exceeds the present value of the costs.
• C)the present value of the revenues exceeds the present value of the costs.
• D)there are no large losses in the early years.

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Definitions:

Creative Process

A sequence of thought and activity phases that lead to the generation of new, innovative ideas or creative outcomes.

Graham Wallas

A social psychologist who proposed a four-stage model of the creative process: preparation, incubation, illumination, and verification.

Inspiration

A mental stimulation to do or feel something, especially something creative, often arising from external sources that resonate deeply.

Brainstorming

A group creativity technique designed to generate a large number of ideas for the solution of a problem.