Judgment by Performance Means That the Competitiveness of a Market

question 66

Multiple Choice

Judgment by performance means that the competitiveness of a market is determined by:

• A) the actual behavior of firms in the market.
• B) the structure of the industry.
• C) the number of firms in the market.
• D) technological considerations.

Understand and apply the concept of net present value (NPV) in investment decisions.

Apply the concept of the internal rate of return (IRR) to assess investment viability.

Differentiate between relevant and irrelevant costs in investment analysis.

Evaluate projects using the simple rate of return method.

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Definitions:

Cost-Leadership Strategy

A business strategy aiming to become the lowest cost producer in the industry, often leading to competitive pricing.

First-Mover Strategy

A market approach where a company is the first to enter a specific market or industry, aiming to gain an advantage by establishing brand loyalty and erecting barriers to entry for future competitors.

Market Share

The portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in that market.

Global Diversification

A strategy that involves a company expanding its operations and investments across a wide range of countries and markets to reduce risk.