Question
A business needs heavy capex and large working-capital investment to grow. Which evaluation criterion is most concerning?
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Answer
Capital requirements.
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Question
Why do brand, patents, network effects, and switching costs matter when evaluating a business model?
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Answer
They protect the revenue stream and support competitive advantage.
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Question
A company's sales depend heavily on two major clients. Which business-model risk is most relevant?
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Answer
Customer concentration risk.
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Question
If a firm can raise prices without losing many customers, what business-model strength does that indicate?
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Answer
Pricing power.
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