Question

A start-up company just acquired a big project. The project requires a lot of money. The company must hold off on building its new office to complete the project. What was the reason for the company's decision?

Answer 1

its A; The marginal benefit of completing the project outweighs the marginal cost of the project.

Answer 2

The reasoning behind it should be that the money must be allocated properly. Start up phase usually has little profit if any at all. A big project is more important than a new facility because a big project can help make it a big company that will easily build a new facility. That's why they invest in the project instead of the new building and they postpone it for a later period.