The Situation That Occurs When Adding More Resources Creates Inefficiencies

question 69

Multiple Choice

The situation that occurs when adding more resources creates inefficiencies is known as ________.

• A)diseconomies of scale
• B)marginal utility
• C)marginal returns
• D)diseconomies of scope

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Definitions:

Expansion Option

The opportunity or ability to invest additional capital in a project, based on its successful performance or other factors.

NPV

Net present value, a calculation that reflects the present value of future cash flows minus initial investments, used to assess the profitability of a project.

Real Option

An approach in financial management that values investment options as if they were financial options, focusing on the flexibility of managerial decisions in response to market changes.

IRR

Stands for Internal Rate of Return, a financial metric used to estimate the profitability of potential investments.