A Financial Manager Is Considering Two Projects,A and B

question 117

Multiple Choice

A financial manager is considering two projects,A and B.A is expected to add $2 million to profits this year while B is expected to add $1 million to profits this year.Which of the following statements is MOST correct?

• A) The manager should select project A because it maximizes profits.
• B) The manager should select the project that maximizes long-term profits, not just one year of profits.
• C) The manager should select project A or he is irrational.
• D) The manager should select the project that causes the stock price to increase the most, which could be A or B.

---

Definitions:

Tax-supported School System

A public education system that is funded and maintained by the taxes collected from the citizens and the government.

Labor Organizations

Groups formed by workers to protect their rights and interests, including unions that negotiate for better wages, working conditions, and benefits.

Middle-Class Reformers

Individuals typically from the middle economic strata of society who advocate for social, political, or environmental changes, often aiming to address injustices or inefficiencies.

Private Schools

Educational institutions that operate independently of the public school system and are funded through tuition payments and private sources.