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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.
At current interest rates and exchange rates, the US might have a $400 billion net financial (capital) account inflow from the rest of the world during 2010, and the
You are an investment banker advising a Eurobank with reference to a new international bond offering it is considering. The carries on are to be employed to fund Eurodollar loans
Define why we measure a project’s risk as the change in the CV. We calculate a project’s risk as the change in the coefficient of variation since this focuses on the change in
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What is an agent? What are the responsibilities of an agent? An agent is a person who has the actual or implied authority to act on behalf of another. The owners whom the agen
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Calculate annual payments into a savings account: Mr. Jones intends to retire in 20 years at the age of 65. As, yet he has not provided for retirement income, and he wants to
Which type of financing is appropriate to each firm?
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Foreign Exchange Rates The proportional value of one currency to other, used to exchange currency from one denomination to another. For example, one British pound is wort
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