What Is the Similarity Between High-Technology Firms and Service-Based Firms

question 147

Multiple Choice

What is the similarity between high-technology firms and service-based firms that makes them risky as restructuring candidates?

• A)They are human-resource dependent.
• B)They have few tangible assets.
• C)Both types of firm rely on financial economies.
• D)The demand for their products is highly sensitive to economic downturns.

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Definitions:

Dividends

Payments made by a corporation to its shareholders, typically from profits, as a distribution of earnings.

Equity Method

An accounting technique used to record investments in other companies, recognizing income proportional to the ownership percentage.

Net Income

A company's ultimate earnings after all taxes, costs, and expenses are subtracted from the gross income.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.