When a Firm Has Multiple Market Opportunities from Which to Choose,marketers

question 118

Multiple Choice

When a firm has multiple market opportunities from which to choose,marketers can use ________ to compare and identify the best ones.

• A)competitor analysis
• B)a competitor matrix
• C)focus groups
• D)S)W.O.T.analysis
• E)a strategic planning grid

Understand how risk in cash flow estimation affects capital budgeting decisions.

Grasp the relevance of portfolio theory and other risk adjustment methods in capital budgeting.

Learn about the challenges and drawbacks of simulation approaches in risk assessment.

Understand the concept of risk-adjusted discount rates and their application in capital budgeting.

---

Definitions:

Marginal Cost

The surplus cost involved in the production of an extra unit of a product or service.

Average Revenue

Average revenue is the amount of income generated per unit of goods or services sold, calculated by dividing the total revenue by the number of units sold.

MC < MR

A condition in economic theory indicating that to maximize profit, a firm should produce more units as long as the marginal cost (MC) of producing an extra unit is less than the marginal revenue (MR) gained by selling it.

Profits

The financial gains attained when the revenues from business activities exceed the expenses, costs, and taxes needed to sustain them.