The New Entry Strategy That a Firm Chooses Is Dependent

question 94

Multiple Choice

The new entry strategy that a firm chooses is dependent upon the ________ and the ________ of the new business concept.

• A) riskiness; cost
• B) riskiness; potential sales
• C) riskiness; innovativeness
• D) idea; innovativeness

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Definitions:

Margin of Safety

The difference between actual sales and the break-even point, used as a buffer against unpredictability in business performance.

Break-Even Point

The point at which total costs equal total revenue, meaning a business neither makes a profit nor incurs a loss.

Sales Units

The total number of units of a product sold during a specific period.

Break-Even Point

The production level or sales volume at which total revenues equal total costs, resulting in neither profit nor loss.