Use the Following to Answer Questions

question 131

Multiple Choice

Use the following to answer questions
Jonathan Moore, president of Polar Manufacturing Company, has just reviewed the performance reports for the previous year and sees that there are some areas in which the company needs to improve.He specifically feels they could do a better job in managing Polar's product mix.Jonathan calls a meeting of all the managers responsible for each of the product lines that Polar currently manufactures.The group decides that they need to eliminate the complete industrial product line of ice chests; they plan to do so by letting the product decline without any changes in the marketing strategy or product.The group also decides to delete Polar's line of thermal underwear, but this product is to be discontinued within the week due to its unprofitability.While discussing these strategies, the group has also uncovered several customer groups for which new products could be developed.The managers decide to assemble a group of people from all functional areas of the company and give them the responsibility for all aspects of the new-product development.
-The decision to delete the industrial product line of ice chests is an example of deleting a product through a(n) __________, while the decision to drop the thermal underwear line is an example of a(n) __________.

• A)run out; phase out
• B)phase out; immediate drop
• C)immediate drop; run out
• D)immediate drop; phase out
• E)phase out; run out

Comprehend the calculation and significance of free cash flow in a company's financial status.

Understand how to perform and interpret vertical analysis on financial statements.

Recognize the importance of a systematic approach to financial analysis, starting with horizontal and vertical analysis.

Assess the impact of various financial ratios on a company's liquidity and ability to pay interest on debt.

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Definitions:

Standard Hour Plan

An incentive plan that sets rates based on the completion of a job in a predetermined standard time.

Predetermined Time

A specific and established period set aside for a particular task or event.

Incentive Plans

Strategies used by employers to motivate and reward employees' performance and productivity.

Organizational Criteria

Standards or principles used to evaluate and make decisions within a business or institution.