Concerning the Classification of Customers in the Business Market, General

question 56

Multiple Choice

Concerning the classification of customers in the business market, General Motors is a(n) ____ when purchasing a mainframe computer system from IBM, but is a(n) ____ when purchasing tires from Goodyear.

• A)user; original equipment manufacturer (OEM)
• B)user; distributor
• C)original equipment manufacturer (OEM); user
• D)user; upstream supplier
• E)original equipment manufacturer (OEM); downstream supplier

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Definitions:

Capital Structure

The mix of debt and equity financing a company uses to fund its operations and growth.

Noncontrolling Interest

An ownership interest in a subsidiary not attributable, directly or indirectly, to the parent company, reflecting the equity in a subsidiary not owned by the parent.

Subsidiary

A company that is controlled by another company, known as a parent company, through the ownership of more than half of its voting stock.

Stock Dividend

A distribution of extra shares to shareholders, as opposed to a cash payment, as a form of dividend.