Question

A decrease in the sales of a current project because of the launching of a new project is A. an overhead expense. B. cannibalization. C. a sunk cost. D. irrelevant to the investment decision.

Answer 1

B. Cannibalization

Step-by-step explanation:

Cannibalization is a marketing strategy which entails a reduction in sales volume, sales revenue, or market share of one product as a result of the introduction of a new product by the same producer.

A company will do this inorder to increase market share and take a gamble that introducing the new product will harm other competitors more than the company itself.