IBM Sold Its PC Division to a Chinese Company Because

question 7

Multiple Choice

IBM sold its PC division to a Chinese company because

• A)IBM realised that labour costs are lower in China.
• B)the PC market in the developed world was saturated, so was no longer attractive to IBM.
• C)the PC was increasingly becoming a multimedia consumer product, whereas IBM is a business-oriented firm.
• D)b and c.

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Definitions:

Inventories

Assets held for sale in the ordinary course of business, or goods that will be used or consumed in the production of goods to be sold.

Gross Profit

The difference between revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.

Operating Expenses

Costs related to the primary activities of a business, excluding costs of goods sold.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including the cost of materials and labor.