If the Adoption of a New Product Will Reduce the Sales

question 82

Multiple Choice

If the adoption of a new product will reduce the sales of an existing product,then the project cash flows should:

• A) reflect only the sales of the new product.
• B) include only the reduction amount.
• C) be reduced by the cash that would have been generated by those sales.
• D) be adjusted upward by the reduction amount.

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Definitions:

Opportunity

A favorable situation or set of circumstances that presents itself, which can potentially lead to growth, development, or success if capitalized on properly.

Strength

An attribute or internal capability of a company or individual that provides a competitive advantage in the market or enhances performance.

Weakness

A term used in SWOT analysis to denote internal limitations or areas where a business or individual performs poorly.

SWOT Analysis

A strategic planning tool used to identify and understand the Strengths, Weaknesses, Opportunities, and Threats related to a business or project.