A major corporation is considering a capital budgeting project that involves the development of a
new technology. The controller estimates the net present value to be negative, yet argues that the
company should invest in the project.
Which of the following statements is MOST correct?
A) The controller should be fired for making such a poor decision.
B) The controller may be considering the option to expand or modify the project in the future.
C) Capital rationing may exist for the current year.
D) The profitability index may be greater than one, giving an accept decision.
B
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Variable costing is a method of reporting that deals only with a manager's controllable costs, variable costs
Indicate whether the statement is true or false
Which of the following must be known about a production process in order to institute a variable costing system?
a. the variable and fixed components of all costs related to production b. the controllable and non-controllable components of all costs related to production c. standard production rates and times for all elements of production d. contribution margin and break-even point for all goods in production
What label listed below is a broad term covering a wide range of feelings including emotions and moods?
a. Affects b. Feeling c. Emotions d. Instinct
All of the following are shareholder rights EXCEPT
A. the right to manage the firm. B. the right to vote. C. the right to information. D. the right to dissent.