The More Dependent a Firm Is on Its Market, the More

question 68

True/False

The more dependent a firm is on its market, the more aggressively it will defend it from another competitor.

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Definitions:

Real Option

The ability to take a course of action that under certain circumstances leads to a benefit. The circumstances that make the action desirable are uncertain, and maintaining the ability to take it requires expenditures before that uncertainty is resolved. Hence, bearing the preliminary cost gives one the option of taking an action in the future that may or may not turn out to be desirable.

Expected NPV

The anticipated Net Present Value of an investment, which estimates the project's profitability by discounting future cash flows to their present value.

Project Outcomes

The results or impacts of a project after its completion, including success, failure, or mixed results.

Sensitivity/Scenario Analysis

Techniques used in financial modeling to examine how different values of an input variable can impact a project or investment's outcome under various scenarios.