If the Herfindahl-Hirschman Index of an Industry Is Less Than

question 192

Multiple Choice

If the Herfindahl-Hirschman Index of an industry is less than 1,000, then the Antitrust Division of the Justice Department

• A) will challenge any merger that would increase the index by over 100 points.
• B) considers the industry unconcentrated.
• C) considers the industry already concentrated.
• D) will challenge any merger that raises the index by more than 50 points.

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Definitions:

Payback Period

The duration it takes for an investment to generate enough cash flow to recover its initial cost.

Average Accounting Returns

A financial ratio that measures a firm's average profitability relative to its investment, typically calculated as net income divided by average book value of investment.

Project

A systematically planned group of tasks that are interdependent, meant to be executed within a fixed timeframe whilst respecting certain financial and additional limits.

Mutually Exclusive Projects

Projects in which the acceptance of one proposal means the others cannot be pursued, requiring a choice to be made.