New projects or products can provide positive indirect effects as well as negative effects.Which one of the following appears to be a negative indirect effect?
A) The new machine required for the project uses less electricity than the existing machine.
B) Orders for your complementary products are expected to increase.
C) Customer orders of supplies for the firm's existing products are expected to decrease.
D) Variable costs are expected to decrease since the firm can order larger quantities.

Question

Quizplus · Accepted Answer

The decrease in customer orders of supplies for the firm's existing products is a negative indirect effect because it suggests that the new project or product may be cannibalizing sales of the firm's existing offerings. The other options suggest positive indirect effects, such as reduced costs, increased efficiency, or increased sales of complementary products.

New Projects or Products Can Provide Positive Indirect Effects as Well