Which of the below statements is FALSE? OA. A synergy gain occurs when a new product can be introduced that complements another current product so that sales for this current product increases. OB. Whenever a new product competes against a company's already existing products and reduces the sales of other products, erosion costs occur. OC. Increases in working capital accounts necessary to support a project add upfront costs, but also provide for cost reductions at the end of the project. OD. Sunk costs can reduce a project's cash flows.
Which of the below statements is FALSE? OA. A synergy gain occurs when a new product can be introduced that complements another current product so that sales for this current product increases. OB. Whenever a new product competes against a company's already existing products and reduces the sales of other products, erosion costs occur. OC. Increases in working capital accounts necessary to support a project add upfront costs, but also provide for cost reductions at the end of the project. OD. Sunk costs can reduce a project's cash flows.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Which of the below statements is FALSE?
OA. A synergy gain occurs when a new product can be introduced that complements another current product so that
sales for this current product increases.
OB. Whenever a new product competes against a company's already existing products and reduces the sales of
other products, erosion costs occur.
OC. Increases in working capital accounts necessary to support a project add upfront costs, but also provide for cost
reductions at the end of the project.
OD. Sunk costs can reduce a project's cash flows.
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