Author Question: If you expect a decline in the price of a stock, you might engage in a short sale. Indicate ... (Read 119 times)

bcretired · **on:** Jul 10, 2018

If you expect a decline in the price of a stock, you might engage in a short sale.

Indicate whether the statement is true or false

Question 2

Solar Confectionary develops a new candy bar and plans to sell each bar for 1.

Solar predicts that 1
million candy bars will be sold in the first year if the new candy bar is produced and sold, and
includes 1 million of incremental revenues in its capital budgeting analysis. A senior executive in
the company believes that 1 million candy bars will be sold, but lowers the estimate of incremental
revenue to 700,000. What would explain this change?
A) a higher selling price for the new candy bars
B) cannibalization of 300,000 of Solar Confectionary's other candy bars
C) a lower discount rate
D) excessive marketing costs to sell the 1 million candy bars