Firms That Have Either Recently Begun Operations in an Industry

question 2

Multiple Choice

Firms that have either recently begun operations in an industry or that threaten to begin operations in an industry soon are considered to be ________ in the five forces framework.

• A) barriers to entry
• B) new entrants
• C) suppliers
• D) buyers

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Definitions:

Deferred Tax Asset

An accounting term representing an asset that may be used to reduce any future tax liability originating from temporary timing differences between the accounting and tax treatment of transactions.

Deferred Tax Liability

Future tax obligations due to temporary differences between the accounting and tax treatment of transactions.

Tax Basis

The value of a taxpayer's investment in property for tax purposes, used to calculate gain or loss on a sale or transfer.

Tax Rate

The proportion of income or corporate profits charged by the government as tax.