Identify four reasons that an international airline such as Southwest or Delta would invest in a project when an analysis using both payback period and net present value indicates it to be a poor investment. (Hint: Think about qualitative factors.) Provide an example of an investment project that supports your answer.

Question

Selina Lamb

Business

3 August, 14:18

Identify four reasons that an international airline such as Southwest or Delta would invest in a project when an analysis using both payback period and net present value indicates it to be a poor investment. (Hint: Think about qualitative factors.) Provide an example of an investment project that supports your answer.

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Answers (1)

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Makenna Boyle · Answer 1

Answer: 1) consistency of the investment decision with corporate objectives

2) commitment to quality

3) corporate culture

4) business responsibilities to society and other external stakeholders.

Explanation: Qualitative factors are outcomes of decisions that can not be measured or quantified.

A company's project having a poor payback period and net present value may still go ahead with the project when it considers the consistency of the project with its corporate objectives; corporate culture; commitment to quality; its responsibilites to society.