For Small Businesses, Product Differentiation

question 19

Multiple Choice

For small businesses, product differentiation

• A) is more difficult than it is for larger firms because of the high cost of product research and development.
• B) usually concentrates on the pricing component of the total product offer.
• C) can be an important strategy to gain market share.
• D) is less important than it is for big firms with multiple product lines.

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Definitions:

Capital Budgeting

Capital budgeting is the process a business undertakes to evaluate potential major investments or expenditures to achieve long-term benefits.

Straight-Line Depreciation

A depreciation method where an asset's cost is evenly distributed over its expected lifespan.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period.

Capital Budgeting

The process of making long-term planning decisions for investment projects, evaluating their potential profitability and financial impact.