Under Conditions of Limited Resources, When a Company Is Comparing

question 96

Multiple Choice

Under conditions of limited resources, when a company is comparing several investments with different amounts of initial outlay, the decision should be made on the basis of:

• A)highest total cash inflows.
• B)shortest payback period.
• C)highest profitability index.
• D)highest NPV.

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Definitions:

Tractors

Farm vehicles designed for high torque at low speeds, used primarily for hauling machinery and trailers in agricultural settings.

Bicycles

Human-powered, pedal-driven vehicles with two wheels attached to a frame, used for transportation, recreation, or sport.

Production

The process of creating goods and services from various input resources like labor, raw materials, and machinery.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing one option over another.