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:

Marginal Revenue

The increased earnings obtained by selling an extra unit of a good or service.

Total Revenue

The total income generated from the sale of goods or services.

Output Level

The total quantity of goods or services produced in a given period of time.

Sole Producer

A market situation in which only one company or entity provides a particular product or service, often leading to a monopoly.