Successful capital budgeting decisions may serve to deter competition because of the cost of entering new markets.

Question

Quizplus · Accepted Answer

When a company makes successful capital budgeting decisions, it may result in the acquisition of new assets or expansion of operations, which can create barriers to entry for new competitors. The cost of entering the market may be too high for new competitors, thus deterring them from entering.

Successful Capital Budgeting Decisions May Serve to Deter Competition Because