Positive NPV projects may originate from cost saving projects such as those that
A) create economies of scale.
B) generate negative cost advantages.
C) ignore advantages in distribution channels.
D) always use new processes or equipment

Question

Quizplus · Accepted Answer

Cost saving projects that create economies of scale can result in positive NPV as they reduce the overall cost of production and increase profit margins. Negative cost advantages (B) and ignoring advantages in distribution channels (C) are unlikely to result in positive NPV projects. The statement in option D that positive NPV projects always use new processes or equipment is not necessarily true.

Positive NPV Projects May Originate from Cost Saving Projects Such