1. A company is facing a decision on whether to invest in a new

technology that could increase production efficiency but requires a

significant upfront cost. What should the company consider as part of its

decision-making process?

 - A) The color of the new equipment

 - B) The potential increase in production efficiency

 - C) The preferences of the production staff

 - D) The current weather conditions

 Answer: B) The potential increase in production efficiency

 Rationale: The decision should be based on factors that will impact the

company's performance and profitability, such as the potential increase in

production efficiency.

2. In a scenario where market trends indicate a shift away from a product

that a company specializes in, what is the most prudent decision-making

approach?

 - A) Ignore market trends and continue production as usual

 - B) Conduct a market analysis to understand the shift

 - C) Diversify immediately into unrelated products

 - D) Increase marketing budget for the existing product

 Answer: B) Conduct a market analysis to understand the shift

 Rationale: Understanding market trends through analysis is crucial for

making informed decisions that align with business strategy and market

demand.

3. When evaluating a potential merger, which of the following is the most

critical aspect to analyze for decision-making?

 - A) The name of the company to be merged with

 - B) The cultural compatibility between the companies

 - C) The favorite sports teams of the CEOs

 - D) The current political climate

 Answer: B) The cultural compatibility between the companies

 Rationale: Cultural compatibility can significantly affect the success of a

merger, impacting employee morale and the integration process.

4. A business model predicts a substantial increase in demand for a

product. What decision should a company make regarding inventory