Evaluating Whether an Industry Presents a Sufficiently Attractive Business Opportunity

question 28

Multiple Choice

Evaluating whether an industry presents a sufficiently attractive business opportunity usually does not involve a consideration of which of the following factors?

• A)The industry's growth potential
• B)Whether competitive pressures will likely grow stronger or weaker
• C)Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces
• D)The company's competitive position in the industry and its ability to perform industry key success factors
• E)Whether the industry's product is strongly or weakly differentiated

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Definitions:

Amortization

The process of gradually reducing a debt through regular payments of both principal and interest.

Risk Optimization

The process of identifying, assessing, and prioritizing risks followed by coordinating and applying resources to minimize, monitor, and control the probability or impact of unfortunate events.

Emerging Companies

are businesses in the early stages of development, usually characterized by innovative products or services and high growth potential.

Equity Capital

The funds raised by a company in exchange for shares of ownership, providing investors with a stake in the company.