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

question 79

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.The _____ phase reflects sales of successful products, and net income turns positive.The firm makes more sales, but it also needs to acquire more goods to sell.Because it usually must pay for the goods it acquires before it collects for the goods it sells, the firm finds itself often short of cash from operations.The faster it grows (even though profitable) , the more cash it needs.Banks do not like to lend for such needs.They view such needs (even though for current assets) as a permanent part of the firm's financing needs.Thus, banks want firms to use shareholders' equity or long-term debt to finance growth in nonseasonal inventories and receivables.

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

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Definitions:

Contraction Phase

The period during a muscle contraction when muscle fibers shorten and tension increases, typically measured in an isotonic contraction.

Femoral Vein

A major vein located in the thigh that carries blood from the lower extremities back to the heart.

Thigh

The part of the human leg between the hip and the knee.

Pelvis

The lower part of the torso, enclosed by the pelvic bones and containing the reproductive organs and part of the digestive tract.