Which of the Following Statements Is Accurate

question 63

Multiple Choice

Which of the following statements is accurate?

• A) A cost-leadership competitive strategy increases the threat of new entrants by lowering cost-based barriers to entry.
• B) Firms with a low-cost position can reduce the threat of rivalry in an industry.
• C) Cost leaders are especially vulnerable to substitute products.
• D) Cost leaders are especially vulnerable to the threat of suppliers.

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Definitions:

Discounted Cash Flow

A valuation method used to estimate the attractiveness of an investment opportunity, by calculating the present value of expected future cash flows.

Discounted Payback

A capital budgeting method that calculates the amount of time needed to recoup an investment based on its discounted cash flows.

Profitability Index

A calculation used to assess the desirability of an investment, defined as present value of future cash flows divided by initial investment.

Net Present Value

Net Present Value (NPV) is a financial measurement that calculates the current value of expected future cash flows from an investment, adjusted for time and interest.