You Are a Manager Considering a Positive-NPV Project

question 51

Multiple Choice

You are a manager considering a positive-NPV project.Which of the following announcements indicate that you may have underestimated its NPV?

• A)Two critical industry suppliers announce that they will merge their firms.
• B)A key competitor releases earnings results,and its stock price drops by 25% in response.
• C)You just found out that the project's chief engineer has recently received multiple job offers from competing firms.
• D)Your marketing staff alerts you that the new project may "cannibalize" sales (i.e.,reduce sales)of existing product to a greater extent.

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Definitions:

X-Coordinate

The horizontal value in a pair of coordinates that determines position along the horizontal axis in a Cartesian coordinate system.

Horizontal Location

The geographical positioning of businesses and industries on a horizontal axis, typically emphasizing the spread across different areas rather than vertical integration.

Curve Shift

A change in the position of a graph curve, indicating a change in the relationship between two variables in economics, like supply or demand shifts.

Movement Along

Refers to the movement along a demand or supply curve, representing a change in the quantity demanded or supplied in response to a change in price.