With Licensing the ________ Is Likely to Be Lower Than

question 25

Multiple Choice

With licensing the ________ is likely to be lower than with FDI because of lower profits; however, the ________ is likely to be higher due to a greater return per dollar invested.

• A) IRR; NPV
• B) NPV; IRR
• C) cost of capital; NPV
• D) IRR; cost of capital

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Definitions:

Aggregate Supply

The sum of all products and services that enterprises in an economy expect to sell during a defined time span.

Price Level

The mean of current prices for all goods and services generated within the economy.

Keynesian Theory

An economic theory proposing that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.

Equilibrium Interest Rate

The interest rate at which the demand for funds equals the supply of funds in the financial market, bringing the market into balance.