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    Question

    When evaluating the profitability of a new project, the

    first step in project profitability analysis is typically:
    A Calculation of future expected revenue Correct Answer Incorrect Answer
    B Estimation of net profit margin Correct Answer Incorrect Answer
    C Assessment of operating expenses Correct Answer Incorrect Answer
    D Determining the cost of the project and potential revenue Correct Answer Incorrect Answer
    E Comparing the project with industry benchmarks Correct Answer Incorrect Answer

    Solution

    Determining initial cost and potential revenues is crucial as the first step in evaluating any project’s profitability.

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