Which of the Following Makes Using Present Value Approaches in Capacity

question 44

Multiple Choice

Which of the following makes using present value approaches in capacity decisions difficult?

• A)The discount rate must be adjusted to account for inflation.
• B)Some cash flows are positive and other cash flows are negative.
• C)The payback period might not be long enough to justify a capacity decision.
• D)Capacity decisions are made amidst much uncertainty, so cash flows cannot be estimated with great accuracy.
• E)There is a cash outflow at the outset followed by, possibly, net cash inflows.

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Definitions:

Wasted Coverage

Situations where marketing efforts reach individuals outside the target market, resulting in inefficiency and wasted resources.

Media Divergence

The trend of media platforms and outlets becoming more varied and specialized, catering to niche audiences and interests.

Advertising Spillover

The effect that advertising for one product or brand has on another due to overlap in customer base or market.

Cord-Cutting

The trend of consumers cancelling or forgoing traditional cable or satellite television services in favor of streaming or Internet-based alternatives.