Strategic Business Units (SBUs)with a Low Share of Slow-Growth Markets

question 274

Multiple Choice

Strategic business units (SBUs) with a low share of slow-growth markets that may generate enough cash to sustain themselves but do not hold the promise of ever becoming real winners for the organization are referred to as

• A)dogs.
• B)cash cows.
• C)stars.
• D)question marks.
• E)hedgehogs.

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Definitions:

Long-lived Assets

Assets expected to provide economic benefits over a period longer than one year, such as buildings, machinery, and equipment.

Capitalizes Expenditures

The process of recording a cost as an asset, rather than an expense, to be written off over the future period.

Rate-of-Return Comparisons

A method of evaluating the profitability of different investments by comparing their rates of return.

Operating Cycles

The period of time it takes for a business to purchase or create inventory, sell the products, and collect cash from the sales.