While Low-Cost Providers Are Champions of Frugality,they

question 92

Multiple Choice

While low-cost providers are champions of frugality,they:

• A) seldom hesitate to spend aggressively on resources and capabilities that promise to drive costs out of the business.
• B) are never hesitant to eliminate costs so as to remain the low-cost provider.
• C) are not blinded by cost reduction,preferring product differentiation strategies that reflect cost-reductions rather than buyer needs and wants.
• D) are also champions of profitability by having prices lower than costs to gain volume gains.
• E) always anticipate negative feedback from stakeholders because of their spending habits.

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Definitions:

Statement of Cash Flows

A financial statement that provides an aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

Transactions and events that impact the net income of a business, primarily related to its core operations.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement, starting with net income and adjusting for non-cash transactions.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.