7.7.Refer to above data analysis and background information, the listed companysuffering two consecutive annual losses should apply the project. According to STpolicy in China, it requires that for the listed company that reported two consecutiveannual losses should henceforth be put into ST statue. Under the ST status, thecompany would be restricted by harsh and strict requirements, such as auditing reportsemi-annual and being unenviable to raise additional capital. Even worse, thecompany may be suspended from trading on the stock exchanges market if it reportsone more loss. As a company manger, we prefer to prevent the company beingsuspended and maintain the daily trading of company, which means that we need togenerate the maximum return in the project next year. On the basis of project free cashflows statement, it shows that the cash inflow in project 6 is $2,200 which is thelargest return among the 8 projects. NPV is not the necessary criteria for measuringthe decision under this condition, but the priority is to present the positive figure inthe following financial statement and offset the loss.
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