Explain What Restrictions on Transferability Are and How They Might

question 25

Essay

Explain what restrictions on transferability are and how they might effect business valuation.

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Definitions:

Fixed Proportions

A production process in which inputs are used in a constant ratio to each other, with no substitution possible between the inputs.

Labor Productivity

An indicator of economic efficiency that evaluates the quantity of goods and services produced (output) relative to the total hours spent in producing those goods and services.

Complementary Resources

Resources used together in production that increase each other's effectiveness.

Fixed Proportions

A production condition where inputs must be combined in strict, unchanging ratios to produce output.