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Basic Question 2 of 2
A replacement project is a project where a firm invests in ______.
B. replacing a productive asset
C. developing a new product line
A. new assets
B. replacing a productive asset
C. developing a new product line
User Contributed Comments 3
| User | Comment |
|---|---|
| jallado0 | to replace a productive asset?? |
| vvenkatr | A firm produces widgets using machine A. Technology improves, and a new machine that can halve the production costs comes into the market. In this case, the firm could certainly consider replacing productive asset A by the new machine. "productive asset" = asset that produces |
| Sorcerer | A - Expansion project B - Repalcement project C - Expansion project @jallado0: Here,we have to take the best possible answer. In this case, it happens to be B. |
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Learning Outcome Statements
describe types of capital investments
CFA® 2025 Level I Curriculum, Volume 2, Module 5.