Which of the Following Is an Advantage of Being a Late

question 12

Multiple Choice

Which of the following is an advantage of being a late entrant into a market?

• A) Late entrants are the first to capture scarce resources.
• B) Late entrants often do not have to invest in exploratory research.
• C) Late entrants often are most likely to capitalize on monopoly rents.
• D) Late entrants are unaffected by switching costs.

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Definitions:

Unamortized Acquisition Differential

The portion of the difference between the acquisition cost of an asset and its carrying value on the balance sheet that has not yet been amortized.

Equity Method

A method of accounting whereby an investor records its investment in an associate company at initial cost and subsequently adjusts the carrying amount of the investment to recognize the investor's share of the earnings or losses of the associate.

Amortization

The gradual reduction of a debt or the allocation of the cost of an intangible asset over a period.

Cost Method

An accounting approach for investments where the investment is recorded at cost, and income is recognized only when dividends are received.