A Company That Produces Racing Motorbikes Has Several Models That

question 69

Multiple Choice

A company that produces racing motorbikes has several models that sell well within the motorcycle racing community and which are very profitable for the company. Despite having a profitable product, why must this company take care to ensure that it has sufficient cash on hand to meet its obligations?

• A) Profits from the sales of popular models will be lost when returned to the shareholders in the form of dividends.
• B) New models will require a lot of money to develop and bring to market before they generate any revenue.
• C) The company will have built up debts which must be repaid in order to bring the current models to market.
• D) Equity must be raised to finance the development of new models to replace the existing models.

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Definitions:

Posttraumatic Growth

Positive psychological changes experienced as a result of struggling with highly challenging life circumstances or traumatic events.

Severely Traumatic

Describes an event or experience that is extremely distressing or disturbing, often leading to lasting psychological impact.

PTSD

Post-Traumatic Stress Disorder, a mental health condition triggered by experiencing or witnessing a terrifying event, leading to prolonged distress and anxiety.

Conditioning

A behavioral process whereby a response becomes more frequent or predictable in a given environment due to reinforcement.