A Proposed Project Will Reduce the Amount of Inventory a Firm

question 36

Multiple Choice

A proposed project will reduce the amount of inventory a firm must keep on hand.This effect:

• A)should be ignored when analysing the viability of the project
• B)is a cash outflow relevant to the first year of the project
• C)is an initial cash inflow that should be included in the analysis
• D)is a negative capital expenditure at time zero
• E)is an erosion cost and should be included in the annual net income of the project

---

Definitions:

Advantages

The beneficial aspects or positive effects that contribute to success or achieving a goal.

Problems

Situations that require solutions or understanding to overcome difficulties.

Decision Tree

A predictive model used in decision analysis to visually map out choices and their potential outcomes, risks, or rewards.

Leadership

The ability to inspire, influence, and guide others toward achieving common goals and visions.