Which of the Following Is True with Regard to Cash

question 4

Multiple Choice

Which of the following is true with regard to cash cows?

• A) They are high-growth, high-share businesses or products.
• B) They can be used to help finance the company's question marks and stars.
• C) They require significant cash to maintain market share.
• D) They are low-share businesses and products.
• E) They do not promise to be large sources of cash.

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Definitions:

Long Run

A time period in economic analysis during which all factors of production and costs can be variable, allowing for full adjustment to changes in market conditions.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent or salaries.

Profit-Maximizing

The operational method a firm adopts to calculate the pricing and output that bring in the highest profit.