What are the implications for a firm that selects the wrong project?

Expert Solution

Implication for a firm that will be selecting the the wrong project would be as follows-

A. It would be leading to negative implications for the bottom line of the company because of negative outcome of the project.

B. It would also be leading into negative outcome for the project in the form of negative net present value and negative profitability index.

C. it can also be hampering the further future growth prospects of the company

D.it would be leading to decrease into the share price of the company because of inability to report profit and market will be highly futuristic in discounting that.

E. It would also lead to liquidity problem for the company because it would not be able to finance its debt, if the project was undertaken on the basis of the project financing.

F. It would also lead to solvency crisis of the company because it would be meaning that company is not able to repay its debt in the longer period of time

G. It will also mean that there would be lesser motivation the part of the employees because they are not able to perform.

jeff jeffy answered 2 years ago

What is wrong with this sentence? What is another word for proper? This project will be...

What is wrong with this sentence? What is another word for proper? This project will be done with our amazing staff/personnel. This is going to ensure that there is a smooth operation of work and consistency. Our amazing staff has been used to PROPER project management and specialization depending on the area of expertise. The personnel includes a project coordinator, business development officer, sales and marketing strategist, finance officer, administrative team, technical team, and a driver. All these people in...

If a company selects Project 1 then it must also select either Project 2 or Project...

If a company selects Project 1 then it must also select either Project 2 or Project 3. Which of the following constraints enforces this condition? a. X1 ? X2 ? X3 ? 0 b. X1 + (X2 ? X3) ? 0 c. X1 + X2 + X3 ? 2 d. X1 ? X2 ? X3 ? 0

What is wrong with using the cost of the specific capital used to finance a project...

What is wrong with using the cost of the specific capital used to finance a project as the discount rate in relation to that project?

Write a research project on Biometrics Authentication. What are the security challenges and privacy implications. What...

Write a research project on Biometrics Authentication. What are the security challenges and privacy implications. What are the technologies used for biometrics authentication?

Ethics is basically about right and wrong but what is right or wrong is relative to...

Ethics is basically about right and wrong but what is right or wrong is relative to certain principles or theories. Discuss the view that no one theory of Ethics is complete by itself.

Dubai Expo 2020 Brief about industry/firm Focus of this project-expansion other opportunity or weakness/competition Implications

Can firms operate with excess capacity? If a firm is operating with excess capacity, what implications...

Can firms operate with excess capacity? If a firm is operating with excess capacity, what implications does this have for the external finance they need when they are expanding?

Can the wrong dividend policy bankrupt a firm? Why or why not?

5.8 What’s wrong? State what is wrong in each of the following scenarios. (a) A parameter...

5.8 What’s wrong? State what is wrong in each of the following scenarios. (a) A parameter describes a sample. (b) Bias and variability are two names for the same thing. (c) Large samples are always better than small samples. (d) A sampling distribution is something generated by a computer.

The only current answer available to this question is wrong. We are evaluating a project that...

The only current answer available to this question is wrong. We are evaluating a project that costs $768,000, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 52,000 units per year. Price per unit is $60, variable cost per unit is $35, and fixed costs are $770,000 per year. The tax rate is 35 percent, and we require a return of 15 percent...

Question