To Remain Number One, Leading Firms Can Take Any of Three

question 2

Multiple Choice

To remain number one, leading firms can take any of three actions. First, they can find ways to expand total demand. Second, they can protect their current market share through good defensive and offensive actions. Third, they can ________.

• A) focus exclusively on divestment
• B) evaluate current employees and reduce costs through downsizing
• C) run smaller companies out of business, causing them to sell out to larger firms
• D) try to expand their market share further, even if market size remains constant
• E) shut down current company locations and reopen in highly populated areas

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Definitions:

Net Operating Working Capital

Net operating working capital is a financial measure that represents the difference between operating current assets and operating current liabilities.

Tax Liability

The total amount of tax that an individual or a corporate entity owes to a tax authority.

Capital Gains

Capital gains are the profit earned from the sale of an asset, such as stocks, bonds, or real estate, which exceeds the purchase price.

Tax Tables

Charts or tables provided by tax authorities that show the amount of tax payable based on income earned, used to calculate tax liabilities.