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:

Potential Influence

The capacity or power to affect change or sway opinions before any action is taken.

Rightness

The quality of being correct, appropriate, or moral in judgement or action.

Low Quality Evidence

Information or data that lacks credibility or reliability, often due to poor research methods or biased sources.

High Quality Evidence

Information or data regarded as exceptionally credible and reliable, often used to support arguments or hypotheses.