When a Food Distributor Considers Changing the Products It Markets

question 54

Multiple Choice

When a food distributor considers changing the products it markets in the southern states because of an increasing percentage of customers from Central and South America, it is examining the ________ forces at work in the southern United States.

• A) economic
• B) demographic
• C) technological
• D) political
• E) legal

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Definitions:

Time Value of Money

The concept that money available now is worth more than the same amount in the future due to its potential earning capacity.

Payback Period

The length of time it takes for an investment to generate cash flows sufficient to recover the initial investment cost.

Project's Liquidity

An assessment of a project's ability to convert its assets to cash quickly without significant loss in value, to meet short-term obligations.

WACC

Weighted Average Cost of Capital (WACC) is the average rate of return a company is expected to pay its security holders to finance its assets.