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3 years ago

Explain two barriers to entry for a new business

Business

2 answers:

Marianna [84]3 years ago

6 0

Answer: Government regulation, Economies of scale

Explanation:

Barriers to entry refers to the restrictions that are imposed on the entry of a new firm or business into the market. These can be,

a). Government regulation- Sometimes the government puts many restrictions on the entry of a new firm. These can be license requirement or by limiting the availability of a resource.

b). Economies of scale- These refer to the efficiency in production that occurs when one firm grows larger in size and is able to cover the entire market at a lower cost than many small firms producing the same good in smaller quantities. The cost of production is lower for a single firm than for many firms.

sp2606 [1]3 years ago

4 0

For the answer tot he questions above, one of the barriers to entry is CAPITAL REQUIREMENTS. the financial resources required for infrastructure, machinery, R&D and advertising. Startups may get around capital requirements by outsourcing parts of the operation to companies that can leverage existing investments.
The other one is ACCESS TO DISTRIBUTION CHANNELS. This can be a barrier if logical distribution channels have been locked up by incumbents.

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For a levered firm, flotation costs should

KengaRu [80]

Answer:

The answer is option B. For a levered firm, flotation costs should be spread over the life of a project, thereby reducing the cash flows for each year of the project.

Explanation:

When a company’s securities are listed on a public exchange, there is a general saying that securities are floated on the exchange. That is how the name flotation costs came about.

Flotation is actually the costs incurred by a company in issuing its securities to public. it is also called issuance costs.

Examples of Flotation costs include charges paid to the investment bankers, lawyers, accountants, registration fees of the securities regulator and the exchange on which the issue is to be listed.

Flotation cost would vary based on several factors, such as company’s size, issue size, issue type (debt vs equity),

In summary, Flotation costs are the cost a company incurs to issue new stock making new equity cost more than existing ones.

Business analysts argue that flotation costs are a one-time expense that should be adjusted out of future cash flows in order to not overstate the cost of capital forever.

It is based on this premise that i chose option B, which states that flotation costs be spread over the life of a project thereby reducing the cash flows for each year of the project at levered firms.

5 0

2 years ago

Maya opened a bakery in a seaside resort town. She was positive she had the perfect location as plenty of hotels and inns were w

Ksivusya [100]

Answer:

B) underestimated the competition.

Explanation:

Maya is trying to pursue a dream of having her own bakery in a vibrant seaside resort town and thought that by using her grandmother's recipes, her business would be a success. But in order for a business to be successful, it takes more than just a great product (or great cookies, muffins, etc.).

The first thing you need to do is analyze the external environment and what other products are offered by your competition. That way you will be able to determine the opportunities or threats to you new venture. E.g. since the town hosts several upscale and expensive resorts, the clients are wealthy and that market attracts good chefs. I'm not sure if they hand out Michelin stars to bakeries, but if you have very good products offered by your competition, then you must work twice as hard.

8 0

2 years ago

How would you define customer satisfaction?

wlad13 [49]

Answer:

Customer satisfaction is defined as a measurement that determines how happy customers are with a company's products, services, and capabilities. Customer satisfaction information, including surveys and ratings, can help a company determine how to best improve or changes its products and services.

3 0

2 years ago

When a firm is in a constant-cost industry, a decrease in demand will result in economic __________ (losses or profits) . This w

labwork [276]

Answer: When a firm is in a constant-cost industry, a decrease in demand will result in economic losses. This will cause exit from the industry, resulting in a decrease in supply over time. This long-run adjustment eventually cause the price level to decrease so that it eventually occur at a higher level than before the demand shift. There will be firms fewer in the industry. The long-run industry supply curve will be downward shifting.

4 0

3 years ago

On June 30, 2011, Weslaco Company’s total current assets were $500,000 and its total current liabilities were $275,000. On July

slavikrds [6]

Answer: the correct answer is a. working capital 225000.00 before issuing the note and 185000.00 after issuing the note. b current ratio 1.82 before the note and 1.59 after the note.

Explanation: Working capital = Current assets - Current liabilities

500000.00 - 275000.00 = 225000.00 before issuing a short term note

the short term note is a current liability.

500000.00 - 315000.00 = 185000.00 after issuing a short term note

Using the Balance Sheet, the current ratio is calculated by dividing current assets by current liabilities: For example, if a company's current assets are $ 5,000 and its current liabilities are $ 2,000, then its current ratio is 2.5.

500000.00 / 275000.00 = 1.82 before issuing the note

500000 / (275000 plus 40000) =

500000 / 315000 = 1.59 after issuing the note.

4 0

3 years ago