Which TWO of the Following Are Methods Used for Assessing

question 3

Multiple Choice

Which TWO of the following are methods used for assessing the profitability of strategic options?

• A) Forecasting the return on capital employed.
• B) Estimating the impact of the investment on the current ratio.
• C) Estimating the impact of the investment on the gearing ratio.
• D) Forecasting the value of the future returns using the discounted cash flow technique.

Understand the regulatory framework surrounding monopolies and public utilities.

Examine the economic justifications for patents and government-sanctioned monopolies.

Analyze the impact of breaking up monopolies on market outcomes.

Understand the concept of economies of scale as it applies to monopolistic markets.

---

Definitions:

Total Revenue

The overall financial gain a business obtains from the sale of goods or delivery of services within a specific timeframe.

Competitive Price-searcher

A market situation where firms have some control over their prices because their products are differentiated, leading them to search for competitive pricing strategies.

Marginal Cost

The cost incurred by producing one additional unit of a product.

Average Cost

The cost per unit of output, represented by dividing the total production cost by the quantity of units produced.