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Identify four reasons that an international airline such as Southwest or Delta would invest in a...

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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Answer #1

There could be several factors for the international airline investing in a project whose analysis depicts longer payback period and poor net present value:

  1. As a strategic alliance with the firm for improved and consistent future business sustenance.
  2. As a social responsibility, to fulfill societal commitments.
  3. Acquisition in order to grow business.
  4. Personal or professional relationships.
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