Question

Capital Budgeting Considerations: A major textbook publisher has an existing finance textbook. The publisher is debating whether to produce an "essentialized" version, meaning a shorter (and lower-priced) book. What are some of the considerations that should come into play?

Answer 1

Answer:1. Adequacy - Will the summarised version covers all the necessary facts in the enlarge version.

2. Pricing- To decide the right price that commesurate with the reduction.

3. Demand- To determine if the Consumers will be willing to demand for it.

4. Alternative product. To decide if the Consumers will not see it as a good substitute to the enlarge version which may lead to the enlarge version extinction

5. Cost. The need to decide if it will be cost effective, that is if meaningful cost reduction will be achieve from the size reduction.