Not All EC Investments Need to Be Formally Justified

question 59

Multiple Choice

Not all EC investments need to be formally justified.All of the following are cases where formal evaluation may not be needed except:

• A)when the value of the investment is relatively small for the organization
• B)when competitors have made that type of investment
• C)when the relevant data are not available,are inaccurate,or are too volatile
• D)when the EC project is mandated and must be done regardless of the costs and benefits

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Definitions:

Short-run Profits

The profit earned by a firm during a period where at least one input is fixed, typically analyzed to understand performance without long-term adjustments.

Capital Flow

The movement of money for the purpose of investment, trade, or business production across international borders.

Industry's Short-run

A period in which at least one of a firm's inputs is fixed, limiting the firm's ability to adjust to changes in market demand.

General Equilibrium

A state in which all parts of the economy (supply, demand, prices) are in balance and all markets are at equilibrium.