The Product Life-Cycle Concept from Microeconomics and Marketing Provides Useful

question 23

Multiple Choice

The product life-cycle concept from microeconomics and marketing provides useful insights into the relations among cash flows from operating, investing, and financing activities.During the _____ cash outflow exceeds cash inflow from operations because operations are not yet earning profits while the firm must invest in accounts receivable and inventories.Investing activities result in a net cash outflow to build productive capacity.Firms must rely on external financing during this phase to overcome the negative cash flow from operations and investing.

• A)introduction phase
• B)growth phase
• C)mature phase
• D)late maturity phase
• E)decline phase

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Definitions:

Interest Earned

The amount of money generated as income on an investment, savings, or lending over a specified period.

Compounded Annually

Interest calculated on the initial principal and also on the accumulated interest from previous periods within a year.

Home Ownership Savings Plan (HOSP)

A savings plan designed to help individuals accumulate funds towards the purchase of a home.

Quarterly

Occurring every three months or constituting one-fourth of a year.