A Business Unit That Usually Generates More Than It Needs

question 125

Multiple Choice

A business unit that usually generates more than it needs to maintain its market share is called a(n) _____ in a portfolio matrix.

• A) star
• B) cash cow
• C) problem child
• D) dog
• E) independent

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Definitions:

Owner's Equity

The residual interest in the assets of the enterprise after deducting its liabilities, also known as shareholder's equity.

Net Income

The final amount of money a company makes after taking away all expenses, including taxes and the costs of operation, from the total income.

Owner Drawings

Amounts withdrawn by the owner of a business for personal use, reducing the owner's equity in the business.

Revenues

The income earned from normal business operations and includes discounts and deductions for returned merchandise.