By Adding New Product Lines Beyond Its Core Business of Computer

question 84

Multiple Choice

By adding new product lines beyond its core business of computer software, like the Surface Pro tablet and Xbox 360 game system, Microsoft primarily benefits by

• A)keeping up in a market where sales come mostly from new products.
• B)satisfying the changing needs of the technological research staff.
• C)avoiding market saturation from products that have just been introduced to the market.
• D)creating diversification and reducing risk.
• E)spreading out production costs.

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Definitions:

Double-Declining-Balance

An accelerated depreciation method that doubles the straight-line depreciation rate, reducing the asset's book value more quickly.

Straight-Line

A method of calculating depreciation of an asset, which allocates an equal amount of depreciation each year over the asset's useful life.

Depreciation Expense

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

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in an equal amount per year.