Zenith Homebuilders Used to Purchase Many Building Lots and Erect

question 76

Multiple Choice

Zenith Homebuilders used to purchase many building lots and erect spec homes (i.e., it gambled that the demand for new houses would be so high that they would sell easily) . Since the real estate slowdown, it builds homes only when owners are under contract. In this case, the company is most likely pursuing a generic business strategy of ________.

• A) retrenchment
• B) stability
• C) diversification
• D) growth
• E) differentiation

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses from revenue, also known as the bottom line.

Constant Percentage

A fixed proportion or rate that is applied to a specific calculation, such as in investment strategies or financial formulas.

Tax Rate

The percentage at which an individual or corporation is taxed, often varying based on income or profit levels.

Cash Dividends

Dividends paid in the form of cash to shareholders, typically out of the company's current or retained earnings.