Ted has 10 content projects he wants to push forward. Each one has a positive net present value with an initial up-front investment followed by a multiple-year revenue stream. Which of the following would be the biggest reason why he would not pursue them all right away?
A)Lock-in
B)Switching costs
C)Cash flow cycle
D)Synergies
E)Risk

Question

Quizplus · Accepted Answer

The best answer here is cash flow. It is important to recognize the impact of negative cash flow in early periods from investments.
Key Takeaway: Cash is the lifeblood of a company. No company can afford to run out of it. Thus, a company cannot make all the investments that might be profitable because it needs cash to run its day-to-day operations.

Ted Has 10 Content Projects He Wants to Push Forward