When a Company Approaches Market Share Growth Under a Build

question 149

Multiple Choice

When a company approaches market share growth under a build strategy, the company

• A)aims to increase its market share in the industry, even at the expense of short-term earnings and cash flow.
• B)seeks to maintain its current market share, while building its return on investment.
• C)seeks market share growth by purchasing companies exiting the market.
• D)focuses on short-term profits and cash.

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Definitions:

Gross Profit

The difference between net sales and the cost of goods sold, indicating the profit made before deducting expenses like salaries and rent.

Payroll Tax Expense

The cost to employers that includes the total of the employer’s FICA OASDI, FICA Medicare, FUTA, and SUTA taxes.

Salaries Expense

An expense account recording the total amount paid to employees for services rendered during a specific period.

Freight-in

Costs associated with transporting inventory to the company, which are typically added to the cost of inventory.