In Order to Achieve a Competitive Advantage in Certain Countries

question 23

Multiple Choice

In order to achieve a competitive advantage in certain countries and certain industries using factor endowments, a company needs to have which of the following?

• A) Only basic factors of production such as land, labor, and capital
• B) Only advanced factors of production such as technological know-how and managerial sophistication
• C) A combination of basic and advanced factors of production
• D) Demand for the industry's product or service
• E) Factor endowments are not a prime determinant of the competitive advantage

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Definitions:

Required Rate

The minimum return an investor expects to achieve when investing in a particular asset or project.

Payback Period

The duration of time it takes for an investment to generate enough revenue to recover the initial cost of the investment.

Profitability Index

A measure used in capital budgeting to evaluate the profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.