Post Utme Redeemers University 2023 Commerce Question 8

Practice objective / multiple choice question 8 from the 2023 Post Utme Redeemers University Commerce examination.

Post Utme Redeemers University 2023 Commerce Objective / Multiple Choice
Question 8 POST_UTME_REDEEMERS_UNIVERSITY • 2023 • COMMERCE • objective

A company is considering investing in a new production facility. The facility will require an initial investment of ₦500 million and is expected to generate annual profits of ₦200 million for the next 5 years. Which of the following is a key consideration for the company's investment decision?

Answer Options

A. The company's current cash reserves are insufficient to cover the initial investment.
B. The expected annual profits are not sufficient to justify the initial investment.
Correct Answer C. The company's return on investment (ROI) will be lower than expected due to the high initial investment.
D. The company's risk tolerance is too high to justify the investment.
Correct Answer
C
Correct Option:
The company's return on investment (ROI) will be lower than expected due to the high initial investment.

About This Question

This is Post Utme Redeemers University 2023 Commerce Question 8. It is one of the objective questions from the 2023 Post Utme Redeemers University Commerce examination.

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