Which One of the Following Would NOT Result in Incremental

question 28

Multiple Choice

Which one of the following would NOT result in incremental cash flows and thus should NOT be included in the capital budgeting analysis for a new product?

• A) A new product will generate new sales, but some of those new sales will be from customers who switch from one of the firm's current products.
• B) A firm must obtain new equipment for the project, and $1 million is required for shipping and installing the new machinery.
• C) A firm has spent $2 million on R&D associated with a new product.These costs have been expensed for tax purposes, and they cannot be recovered regardless of whether the new project is accepted or rejected.
• D) A firm can produce a new product, and the existence of that product will stimulate sales of some of the firm's other products.
• E) A firm has a parcel of land that can be used for a new plant site or be sold, rented, or used for agricultural purposes.

Understand the purpose and key components of a marketing plan.

Comprehend the significance and frequency of strategic planning for firms.

Grasp the overall purpose and the actionable aspect of a marketing plan.

Understand the importance of situation analysis in strategic decision-making.

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Definitions:

Forecasts Of Interest Rate

Predictions about future interest rates based on current economic indicators and financial market trends.

Rate Anticipation Swap

A financial derivative strategy used by investors who anticipate changes in interest rates, involving swapping one set of cash flows for another.

Bond Swap

A strategy that involves selling one bond and using the proceeds to purchase another bond, typically to improve yield or extend maturity.

Yield To Maturity

The total return anticipated on a bond if held until it matures, including all interest payments and the repayment of principal.