Question: Suppose that a company is evaluating a project to launch a new product. It estimates that if it launches the new product: i) The sales
Suppose that a company is evaluating a project to launch a new product. It estimates that if it launches the new product:
i) The sales of some other products will decline ii) The interest expense of the company will go up iii) The firm pays higher dividends by retaining less earnings iv) The inventory will go up at the beginning of the project and then decline towards the end of the project Which of the above should the company take into account when calculating the Project's NPV? a) i, iv b) i, ii, iv c) iii, iv
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