Project Sigma Requires an Investment of $1 Million and Has

question 95

Multiple Choice

Project Sigma requires an investment of $1 million and has a NPV of $10.Project Delta requires an investment of $500,000 and has a NPV of $150,000.The projects involve unrelated new product lines.

• A)Both projects should be accepted because they have positive NPV's.
• B)Neither project should be accepted because they might compete with one another.
• C)Only project Delta should be accepted.Alpha's NPV is too low for the investment.
• D)The company should look at other investment criteria,not just NPV.

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Definitions:

Purchase Order

A purchase order is a written authorization for a supplier to deliver products or services at a specified price, which becomes a binding contract once it is accepted by the supplier.

Title

The legal right to own, use, or sell a particular piece of property or asset.

Deliverable State

The condition of a commodity or item being suitable for delivery to fulfill the terms of a contract.

Notified

Being informed or made aware of information, actions, or requirements officially or formally.