Which of the Following Are Examples of Erosion

question 7

Multiple Choice

Which of the following are examples of erosion?
I.the loss of sales due to increased competition in the product market
II.the loss of sales because your chief competitor just opened a store across the street from your store
III.the loss of sales due to a new product which you recently introduced
IV.the loss of sales due to a new product recently introduced by your competitor

• A)III only
• B)III and IV only
• C)I, III and IV only
• D)II and IV only
• E)I, II, III, and IV

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Definitions:

Maturity

The point in time when the principal amount of a financial instrument becomes due and is to be paid.

Accrual Earnings

The earnings of a company that are calculated based on accrual accounting, which records revenues when earned and expenses when incurred, regardless of cash flow.

Realized Operating Cash Flows

Cash flows that are generated from a company's normal business operations and have been received or can be readily converted to cash.

Stock Returns

The total return on investment from owning shares in a company, including dividends received and capital gains.