Which of the Following Is a Potential Risk of a Brand

question 21

Multiple Choice

Which of the following is a potential risk of a brand umbrella?

• A)The brand umbrella reduces the incumbents sunk cost of introducing a new product
• B)The umbrella brand may help the incumbent navigate the vertical chain
• C)The brand umbrella allows an incumbent offset uncertainty about the quality of a new product
• D)A brand umbrella may make suppliers and distributors more willing to enter relationship specific investments in or sell credit to incumbents
• E)If a new product under the umbrella fails,consumers may become disenchanted with the entire brand

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Definitions:

Operating Leases

Leases used for short-term leasing of assets, where the lessee does not assume the risk of ownership, and the asset will be returned to the lessor at the end of the lease term.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets to generate sales revenue, calculated by dividing sales revenue by the average total assets.

Operating Lease

Operating lease is a contract that allows for the use of an asset but does not convey rights of ownership of the asset.

Capital Lease

A leasing arrangement in which the lessee records the leased asset as if it was a purchase, reflecting it on their balance sheet as an asset and a corresponding liability.