A financial manager is considering two projects, A and B. A is expecte

A financial manager is considering two projects, A and B. A is expected to add $2 million to profits
this year while B is expected to add $1 million to profits this year. Which of the following
statements is MOST correct?

A) The manager should select project A or he is irrational.
B) The manager should select project A because it maximizes profits.
C) The manager should select the project that maximizes long-term profits, not just one year of
profits.
D) The manager should select the project that causes the stock price to increase the most, which
could be A or B.

ANSWER

D