Why Would a Firm Ever Forgo a Positive NPV Project

question 5

Essay

Why would a firm ever forgo a positive NPV project? How can hedging help prevent this situation from arising?

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Definitions:

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for physical and mental activity by accelerating heart rate, constricting blood vessels, and raising blood pressure.

Motor Nervous System

Part of the nervous system responsible for controlling voluntary muscle movements in the body.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brainstem down the back, transmitting neural signals between the brain and the rest of the body.

Interneurons

A type of neuron that serves the role of communication between sensory neurons and motor neurons, mostly located within the central nervous system.