The Term Privatization Is Typically Used to Describe

question 23

Multiple Choice

The term privatization is typically used to describe:

• A) firms that are purchased by their managers.
• B) firms that are purchased by the government.
• C) firms that are bought out by other firms.
• D) government operations that are purchased by corporations and other investors.

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Definitions:

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or to evaluate the attractiveness of an investment.

Incremental Cost Approach

A decision-making process that focuses on the changes in total cost resulting from a specific business decision, considering only the relevant costs and benefits that differ between alternatives.

Operating Costs

Expenses associated with running a business's core activities on a day-to-day basis, such as salaries, rent, and utilities.

Discount Rate

The discount rate that is employed during discounted cash flow evaluation to ascertain the present valuation of future expected cash flows.