On What Assumption Is the BCG Portfolio Model Based

question 1

Multiple Choice

 On what assumption is the BCG Portfolio Model based? 

• A) Profitability and cash flow will be closely related to sales volume.
• B) ROI will be directly related to sales volume.
• C) Cash flow is equal to investment.
• D) Investment + Cash flow = Profitability

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Definitions:

Monthly Sales

The total value or volume of sales transactions that a business completes within a single month, often used to assess performance trends.

Net Operating Income

A company's income after operating expenses have been deducted but before deducting interest expenses and taxes.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs have been deducted, indicating how much of sales revenue is available to cover fixed costs and generate profit.

Target Profit

The desired level of financial gain set by a business for a specific period, guiding pricing strategies and operational decisions.