The Bargaining Leverage of Suppliers Is Greater When

question 107

Multiple Choice

The bargaining leverage of suppliers is greater when

• A)the suppliers' products/services account for a small percentage of industry members' costs.
• B)industry members incur low costs in switching their purchases from one supplier to another.
• C)industry members account for a big fraction of supplier's sales.
• D)there is extensive seller-supplier collaboration.
• E)the supplier industry is composed of a large number of relatively small suppliers.

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Definitions:

Cash Received

The total amount of cash a company collects from its various sources, including operations, financing, and investing activities, during a period.

Indirect Method

A method of computing the net cash provided by operating activities that starts with net income and adjusts it to a cash basis.

Operating Activities

These are the day-to-day actions that are involved in running a business which affect the cash flow but are not investing or financing activities.

Investing Activities

These activities generate cash inflows and outflows related to acquiring or disposing of noncurrent assets such as property, plant, and equipment, long-term investments, and loans to another entity.