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

question 58

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.
• E) none of the above

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Definitions:

Maximize Profits

Maximizing profits is the strategic goal of increasing a company's earnings to its highest possible level by optimizing revenue streams and reducing costs.

Differential Pricing

The strategy of selling the same product to different customers at different prices.

Total Cost

The complete cost of production or service delivery, including direct, indirect, fixed, and variable costs.

Overbooking

The practice of selling more of a service than what is actually available, based on the expectation that there will be cancellations.