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Why do firms enter an industry when they know that in the long run economic profit will be zero?
Firms enter an industry while they suppose to earn economic profit. These short-run profits are sufficient to encourage entry. Zero economic profits in the long run involve normal returns to the factors of production, as well as the labor and capital of the owners of firms. For instance, the owner of a small business might experience positive accounting profits before the foregone wages from running the business are subtracted from these profits. If the revenue minus another costs is just equivalent to what could be earned elsewhere after that the owner is indifferent to staying in business or exiting.
A mortgage, is sold to the SPV at the discretion of the bank to securitize it into a mortgage backed security, that is, the mortgage is said to
The term 'Eurobonds' refers to bonds issued and sold outside the home country of the currency. For example, a dollar denominated bond issued in the UK is a Euro (
The following particulars relate to ABC Ltd. at the end of 2008: (i) Rs. 500,000 equity shares of Rs. 10 each. Present dividend per share is Rs. 15; Market price Rs. 100 per sh
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Why investment decision depend on financing decision All these decisions interact, investment decision cannot be taken without taking the financing decision, working capital de
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