Weisbach Electronics is considering investing in India.Which of the following factors would make the company less likely to proceed with the investment?
A) The company would have the option to withdraw from the investment after 2 years if it turns out to be unprofitable.
B) The investment would increase the odds of the company being able to subsequently make a successful entry into China.
C) The investment would preclude the company from being able to make a profitable investment in China.
D) Competitors are considering similar investments in India,and the firm can discourage them from trying by entering now.
E) The new plant could be easily retrofitted to manufacture many of the firm's other products.

Question

Quizplus · Accepted Answer

If the investment would preclude the company from being able to make a profitable investment in China, it may not be worth the risk. Since China is a larger market than India, it may be wise to forgo investing in India in order to keep the option open for a potentially more profitable investment in China. The other options given do not necessarily make the investment less attractive.

Weisbach Electronics Is Considering Investing in India