A Company's Business Model

question 8

Multiple Choice

A company's business model

• A) concerns the actions and business approaches that will be used to grow the business,conduct operations,please customers,and compete successfully.
• B) relates to the principle business components that will allow the business to generate revenues ample to cover costs and produce a profit.
• C) concerns what moves in the marketplace it plans to make to outcompete rivals.
• D) deals with how it can simultaneously maximize profits and operate in a socially responsible manner.
• E) concerns how management plans to pursue strategic objectives,given the larger imperative of meeting or beating its financial performance targets.

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Definitions:

Discount Rate

The discount rate used in DCF method to establish the current worth of future financial flows.

Independent Projects

Investment projects that do not affect the cash flows or feasibility of other projects under consideration.

Profitability Index

A financial metric used to evaluate the potential profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Discount Rate

The interest rate used to discount future cash flows to their present value, which is crucial in time value of money calculations and in assessing investment opportunities.