In the Context of Strategies, Which of the Following Is

question 6

Multiple Choice

In the context of strategies, which of the following is a difference between value creation and value capture?

• A) Value creation is maximizing the difference between profits in two consecutive financial years, whereas value capture is the process of maximizing the difference between a customer's willingness to pay and the cost of the product.
• B) Value creation is the process of maximizing the portion of that value the company keeps, whereas value capture is the process of lowering the prices of products so that it is the least in a competitive market.
• C) Value creation is the process of maximizing the difference between a customer's willingness to pay and the cost of the product, whereas value capture is the process of maximizing the portion of that value the company keeps.
• D) Value creation is the difference between the price a company charges customers and the cost of making the product, whereas value capture is maximizing the difference between profits in two consecutive financial years.

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Definitions:

Accounts Receivable Period

The accounts receivable period is the average number of days it takes for a company to collect payments owed by its customers after a sale has been made.

Expected Sales

The projected amount of sales that a company anticipates to achieve within a specific period.

Average Collection Period

The average number of days it takes a company to receive payment after a sale has been made.

Operating Cycle

The period between the acquisition of inventory and the collection of receivable generated from sales, reflecting how long it takes for a business to convert its inventory into cash.