The Option to Alter Operating Scale Generally Requires Pre-Planning So

question 34

Multiple Choice

The option to alter operating scale generally requires pre-planning so that project output can be changed quickly to meet demand,but that pre-planning involves:

• A)a waste of assets since the plans that are made for the future alteration of operating scale may never be used.
• B)an option premium in the nature of the extra investment that is required in case the operating scale needs to be altered.
• C)abandoning other projects that the firm might profitably pursue.
• D)seeking projects that have an estimated NPV in excess of 1.

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Definitions:

Environmental Component

Involves the elements of the physical and social setting that can affect individuals' behavior and well-being at work, such as noise level and office layout.

Coping Orientation

An individual's habitual methods or strategies to manage stress, challenges, or adversity.

Vested Interest

A personal stake or involvement in an undertaking or situation, where the individual stands to gain from its successful outcome.

Environmental Uncertainty

A lack of predictability or stability in the external conditions that can affect an organization's performance.