Firms often decide against entering new businesses because they are not likely to generate sufficient return on capital to justify the ________.

Question

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Premium cost is the additional cost incurred by a firm when entering a new business. This cost can include the cost of acquiring new assets, hiring new employees, and marketing the new business. Firms often decide against entering new businesses because they are not likely to generate sufficient return on capital to justify the premium cost.

Firms Often Decide Against Entering New Businesses Because They Are