A Negative NPV (Net Present Value)for an Option Indicates That

question 11

Multiple Choice

A negative NPV (net present value) for an option indicates that the option will

• A)gain money for the supply chain.
• B)lose money for the supply chain.
• C)maximize profit for the supply chain.
• D)minimize profit for the supply chain.

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Definitions:

Agency Costs

Agency costs arise from conflicts of interest between managers and shareholders, leading to expenses that do not necessarily benefit the shareholders.

Market Share

The portion of a market controlled by a particular company or product, expressed as a percentage of total sales volume in a particular industry.

Salary Incentives

Salary incentives are additional compensation above base salary offered to employees as a motivation to exceed performance targets or achieve specific objectives.

Cash Flows

Money moving in and out of a business, indicating the company's liquidity over a certain period.