What Is the Wal-Mart Effect

question 86

Essay

What is the Wal-Mart effect?

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Definitions:

Opportunity Costs

The advantages that a person, business, or investor loses by selecting one option instead of another.

Sunk Costs

Past expenses that have already been incurred and cannot be recovered, and therefore should not affect future business decisions.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales.

Cost Of Capital

The rate of return that a business needs to generate from its investments in order to cover the cost of raising funds, either through debt or equity.