Scenario 6.2 Use the Following to Answer the Questions

question 163

Multiple Choice

Scenario 6.2
Use the following to answer the questions.
GE Transportation produces locomotive engines for sale in countries around the world.After looking at the total market for locomotive engines,the company found that various rail lines wanted different types of engines.Major rail lines in the U.S.and South America wanted engines to haul heavy freight.Rail lines in Sweden and Germany were interested in a cleaner,greener locomotive engine.Rail lines operated by several Eastern European countries wanted locomotive engines for running short distances between cities in their own country.GE Transportation is currently manufacturing its GE 4400 for heavy freight,its Hybrid Eco-Engine,and its Dash 9,suited for shortline transport.
-Refer to Scenario 6.2.Suppose that GE Transportation decided to produce only locomotive engines for rail lines in the United States.The segmentation variable then would be

• A)geographic location.
• B)type of organization.
• C)market density.
• D)product use.
• E)customer size.

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Definitions:

Residual Income

The amount of income that an individual or company has after all personal debts and expenses have been paid.

Investment Opportunity

A financial asset or venture that is expected to yield returns or profits in the future.

Combined Residual Income

The total residual income from all sources or divisions within an organization, after accounting for opportunity costs.

Residual Income

The amount of income that an individual or company retains after deducting all expenses and cost of capital, including debt and equity costs.