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Franchising is an example of a new entry strategy that increases the risk of downside loss for the franchisees.
Average Total Cost
Calculated as the total cost of production (fixed plus variable costs) divided by the total output, indicating the average cost per unit produced.
Average Variable Cost
The total variable costs (costs that vary with production volume) divided by the quantity of output produced, representing the variable cost per unit.
Net Present Value (NPV)
The difference between the present value of cash inflows and the present value of cash outflows over a period of time. It's used to evaluate the profitability of an investment or project.
Capital Investment Funds
Financial resources that are used by a company to purchase physical assets like property, industrial buildings, or equipment.
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