When Competitive Position Is Weak and the Market Attractiveness Is

question 78

Multiple Choice

When competitive position is weak and the market attractiveness is high,the firm's primary approach should be to:

• A)invest to build.
• B)build selectively.
• C)manage for earnings.
• D)protect and refocus.

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Definitions:

Payback Period Method

A capital budgeting technique that calculates the time needed for an investment to generate cash flows sufficient to recover the initial investment cost.

Capital Budgeting Decisions

The process of planning and evaluating investments in long-term assets, considering their potential to generate future profits.

Long-Term Investments

Investments made with the intention of holding the asset for a period exceeding one year, typically to earn interest, dividends, or capital gains.

Internal Rate of Return

A metric used in capital budgeting to estimate the profitability of potential investments, represented as the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.