Pickles Corp. is a company which sells bottled iced tea. The company is thinking about expanding its operations into the bottled lemonade business. Which of the following factors should the company incorporate into its capital budgeting decision as it decides whether or not to enter the lemonade business?

Question

Quizplus · Accepted Answer

Option A is important because it considers the impact of introducing a new product on existing sales, which is a key factor in determining the potential profitability of a new project. Option C is important because it presents an alternative use for the building, which could be a financially viable option for the company if it decides not to enter the lemonade business. Option B, while providing information about the building, is not directly relevant to the decision of whether or not to enter the lemonade business. Therefore, options A and C are the best choices to incorporate into the capital budgeting decision.