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) Sales force will need to be increased.
C) Sales of a similar product of your firm's will decline.
D) Additional machinery must be purchased.

Question

Quizplus · Accepted Answer

The launch of a new product may lead to a shift in consumer preferences, resulting in decreased sales of a similar product that the firm already offers. This is an indirect effect, as it is not a direct result of launching the new product itself but is a consequence of the changing market environment. Choices A, B, and D relate to more direct effects of launching a new product, such as increased operational costs and production requirements.

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