A Firm Has Three Different Investment Options,each Costing $10 Million

question 49

Multiple Choice

A firm has three different investment options,each costing $10 million.Option A will generate $12 million in revenue at the end of one year.Option B will generate $15 million in revenue at the end of two years.Option C will generate $18 million in revenue at the end of three years.Which option should the firm choose?

• A)Option A
• B)Option B
• C)Option C
• D)The answer depends on the rate of interest,which is not specified here.

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Definitions:

LTL Carrier

Less-than-truckload carrier, a transportation service for shipping goods that do not require a full truckload.

Package Carrier

Companies or services that specialize in the delivery of packages, documents, and freight from one location to another.

Private Fleet

A fleet of transportation vehicles owned and operated by a company for its own logistics and distribution needs.

Safety Inventory

Extra inventory held as a buffer against demand variability and supply chain disruptions to prevent stockouts.