Understanding the External Environment of a Firm Requires One Ultimately

question 29

Multiple Choice

Understanding the external environment of a firm requires one ultimately to identify:

• A)The opportunities to make profit in the industry
• B)The five forces identified by Porter's model
• C)The barriers to entry and to exit in that industry
• D)The expected level of profit in the mid.term for that industry

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Definitions:

Maturity Date

The date on which a financial obligation is due to be paid, such as the final payment date of a loan or bond.

Credit Sale

A sales transaction in which the amount due is not paid at the time of sale but is promised to be paid in the future by the purchaser.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.

Accrued Interest

The interest that has been earned but not yet paid, accumulating on loans, bonds, or any other financial instruments over a period of time.