In the context of the capital budgeting analysis of an MNC that has strong foreign competitors,"lost sales" refers to:

Question

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"Lost sales" in this context refers to the potential sales revenue that the MNC may have captured if they had not lost business to their strong foreign competitors. Option B describes a scenario where the MNC builds a new manufacturing facility abroad that cannibalizes the sales revenue of an existing project. Option A refers to a different concept of cannibalization and option C is not related to the concept of lost sales.

In the Context of the Capital Budgeting Analysis of an MNC