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A financial manager is considering two projects, A and B . A is expected to add $ 2 million to profits this year while B
A financial manager is considering two projects, A and B A is expected to add $ million to profits this year while B is expected to add $ million to profits this year. Assuming the firms goal is to maximize value for the owners of the firm, which of the following statements is MOST correct?
A
The manager should select the project that causes the cash flow to increase the most, which could be A or B
B
The manager should select the project that maximizes longterm profits, not just one year of profits.
C
The manager should select project A because it maximizes profits.
D
The manager should select project A or he is irrational.
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