A company is investing in a huge diversification project. The plan is to develop and sell a whole new product line that they have never sold before. They’ve already started a massive marketing campaign for this new product line and they are getting good feedback in their market research. They’ve had to use debt funding in order to finance the project, but they hope that the returns will be worth the investment and restructuring. If they are successful they will be a step ahead of all their competitors and offer something none of them can. What is the risk appetite of this company?
Correct Answer: A
Which of the following are TRUE about the theory of constraints? Select ALL that apply.
Correct Answer: A, C, D
You have just assessed an investment proposal, involving an immediate cash outflow followed by a series of cash inflows over the next 7years, by deducing the NPV and the IRR. You have now discovered that you have underestimated the discount rate. Correcting the underestimation will have the following effect, relative to your original deductions:
Correct Answer: A
Which of the following are TRUE about the theory of constraints? Select ALL that apply.
Correct Answer: A, C, D





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