In the Context of Buying a Business,a Known Commodity May

question 17

Multiple Choice

In the context of buying a business,a known commodity may command a higher price for what reason?

• A)historical projections have intrinsic value
• B)avoiding start-up costs has value
• C)property values are variable
• D)the value of a founder's stock decreases over time

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Definitions:

Market

An economic system that allows buyers and sellers to exchange goods and services.

Price War

A price war is a competitive situation in which retailers or suppliers repeatedly cut prices in order to undercut competition, often to the point where the prices are unsustainable in the long term.

Strategic Management Approach

A management framework that involves setting objectives, analyzing competitive environments, assessing internal organization, evaluating strategies, and ensuring management oversight of strategy execution.

Cost Leadership

A business strategy focused on achieving the lowest operational costs within an industry, thereby allowing the company to offer its products or services at a lower price than its competitors.