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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.
Explain how to resolve a "ranking conflict" between the net present value and the internal rate of return. Why should the conflict be resolved as you explained? Whenever there
What is Sinking Fund A provision which requires the corporation to set aside a fixed amount every year to help provide for orderly repayment of the debt issue.
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Determine the Objectives of the Firm Objectives of the Firm - Profit Maximisation and Wealth Maximisation To put it simply, we may say that goal of any business is to max
Typically in a bond, we find an inverse relation between the price and the required yield. We know that the price of the bond is the present val
Question: You have been appointed as the head of the treasury of Platza International, an automobile firm with many subsidiaries abroad. The management of Platza International
Q. Nature of Financial Management? Financial Management is an necessary part of Top Management: - In the contemporary business management the financial manager is one of the ac
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a) This refers a business, such as Palmolive-Colgate being able to sell the same product using the same marketing approach all over the world. It is used by firms with global brand
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