Which One of These Has the Least Potential to Increase

question 22

Multiple Choice

Which one of these has the least potential to increase the net present value of a proposed investment? Assume the project has a positive net present value in at least one set of circumstances.

• A)Ability to wait until the economy improves before making the investment
• B)Ability to immediately shut down a project should the project become unprofitable
• C)Option to increase production beyond that initially projected
• D)Option to place the investment on hold until a more favorable discount rate becomes available
• E)Option to discontinue a project at the end of its intended life

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Definitions:

Legal Obligations

Duties imposed by law on individuals and organizations, including adherence to statutes, regulations, and court decisions.

Social Obligations

Responsibilities or duties that individuals or organizations have towards society, including ethical practices and contributions to community welfare.

Human Resource Management

The practice of recruiting, hiring, deploying, and managing an organization's employees.

Small Organizations

Businesses or entities with a limited number of employees and typically a narrow scope of operations.