Post Utme Esut 2022 Commerce Question 26

Practice objective / multiple choice question 26 from the 2022 Post Utme Esut Commerce examination.

Post Utme Esut 2022 Commerce Objective / Multiple Choice
Question 26 POST_UTME_ESUT • 2022 • COMMERCE • objective

A company is considering two different marketing strategies for its new product. Strategy A involves a high upfront cost of ₦1,500,000 but is expected to generate ₦3,000,000 in revenue over the first year. Strategy B has a lower upfront cost of ₦750,000 but is expected to generate ₦2,000,000 in revenue over the first year. Which strategy has a higher net present value (NPV) if the discount rate is 10%?

Answer Options

Correct Answer A. Strategy A
B. Strategy B
C. Both strategies have the same NPV
D. Neither strategy has a positive NPV
Correct Answer
A
Correct Option:
Strategy A

About This Question

This is Post Utme Esut 2022 Commerce Question 26. It is one of the objective questions from the 2022 Post Utme Esut Commerce examination.

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