While Hybrid Vehicles Are Very Fuel-Efficient, They Are Also Expensive

question 176

Multiple Choice

While hybrid vehicles are very fuel-efficient, they are also expensive to purchase. Still, hybrid vehicles sales have a compound annual growth rate of 88.6 percent in recent years. Several years ago, the Honda Motor Co. unveiled the hybrid version of the Honda Civic. Sales of the Civic eventually surpassed those of the Toyota Prius, making it the top-selling hybrid car in the United States. For years, Honda has experienced tremendous success with its Accords; these Honda cars are the top-selling automobiles in the United States. Where would the Honda Civic (hybrid version) and the Honda Accord fall in the BCG business portfolio analysis matrix?

• A) The hybrid Civic is a star; the Accord is a cash cow.
• B) The hybrid Civic is a cash cow; the Accord is a star.
• C) Due to the overwhelming success of Honda cars, both the Accord and the hybrid Civic are cash cows.
• D) The hybrid Civic is a dog; the Accord is a cash cow.
• E) The hybrid Civic is a dog; the Accord is a star.

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Definitions:

Board of Directors

A group of individuals elected to represent shareholders and make major decisions regarding the company's management, operations, and financial policy.

Business Judgment Rule

A legal principle that protects company directors and officers from liability for decisions made in good faith and in the company's best interest.

Insider Trading

The illegal practice of trading on the stock exchange to one's own advantage through having access to confidential information.

Binding Arbitration

A legal process where a dispute is resolved by an impartial third party, whose decision is final and binding.