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Companies considering new cost-cutting manufacturing processes often compare the projected results of making the investment against the alternative of not making the investment with costs, selling prices, and share of market remaining constant.
Which of the following, assuming that each is a realistic possibility, constitutes the most serious disadvantage for companies of using the method above for evaluating the financial benefit of new manufacturing processes?
(A) The costs of materials required by the new process might not be known with certainty.
(B) In several years interest rates might go down, reducing the interest costs of borrowing money to pay for the investment.
(C) Some cost-cutting processes might require such expensive investments that there would be no net gain for many years, until the investment was paid for by savings in the manufacturing process.
(D) Competitors that do invest in a new process might reduce their selling prices and thus take market share away from companies that do not.(D)
(E) The period of year chosen for averaging out the cost of the investment might be somewhat longer or shorter, thus affecting the result. 看了以前的讨论帖,如果按大家解释的理解确实应该选择D。但是如果cost,sales price,market share 不变,还怎么比较invest和not invest之间的区别呢?因为这个investment目的是要cost-cuting的,但是这里为什么还要在cost不变的前提下比较呢? |
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