Which of the Following Is an Exit Barrier for Firms

question 7

Multiple Choice

Which of the following is an exit barrier for firms in an industry?

• A)Sunk costs
• B)Labor agreements or commitments to purchase raw materials
• C)Obligations to input suppliers
• D)Government restrictions
• E)All of the above

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Definitions:

Present Value

This refers to the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Future Cash Flows

The estimated amounts of money expected to be received or paid out in the future as a result of business operations or investments.

Capital Investment Decisions

Pertains to the process of deciding on and committing to projects or investments that have long-term implications for a company's growth and profitability.

Long-term Commitment

A contractual agreement to perform certain activities or make payments over a period longer than one year.