New projects or products can have an indirect effect on the firm as well as a direct effect.Which of the following appears to be an indirect effect of launching a new product?
A)additional working capital is required.
B)the sales force will need to be increased.
C)sales of our similar product will decline.
D)additional machinery must be purchased.

Question

Quizplus · Accepted Answer

Launching a new product may attract customers away from similar products the firm already offers, causing a decline in sales for those existing products. This is an indirect effect because it is not a direct result of the new product, but rather a consequence of how the market responds to the new product. The other choices are direct effects of launching a new product: A) additional working capital is needed to fund the development and production of the new product; B) the sales force may need to be increased to handle the additional sales generated by the new product; and D) additional machinery may be necessary to manufacture the new product.

New Projects or Products Can Have an Indirect Effect on the Firm