What Is Wrong with the 80-20 Scheme

question 36

Multiple Choice

What is wrong with the 80-20 scheme?

• A) It does not consider the differences between 80 percent and the 20 percent
• B) Customers who are labelled could change and future advertising misses them
• C) It does not consider the differences among the 80 percent in the "rest" segment
• D) It does not break down the variables within the remaining 20 percent
• E) It is too broad to segment customers in this way

---

Definitions:

Total Stockholders' Equity

The net value of a company, calculated as total assets minus total liabilities.

Retained Earnings

The portion of a company's profits that is kept or retained for re-investment in the business or to pay debt, rather than being paid out as dividends to shareholders.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the market.

Issue Price Over Par

Occurs when a security, typically a bond, is sold at a price higher than its face value.