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

question 55

Multiple Choice

The product life-cycle concept from microeconomics and marketing provides useful insights into the relations between cash flows from operating, investing, and financing activities.The beginning of the decline phase can produce

• A)negative cash flow from operations.
• B)sales of unneeded property, plant, and equipment can result in negative cash flow from investing activities.
• C)excess cash flow to repay remaining debt or diversify into other areas of business.
• D)all of the above
• E)none of the above

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Definitions:

Intra-entity Inventory

Intra-entity Inventory pertains to the goods sold between divisions or entities within the same parent company, affecting consolidated financial statements.

Markup

The difference between the cost of a good or service and its selling price, expressed as a percentage over the cost.

Equity Method

An accounting technique used to record investments in associated companies, where the investment is initially recorded at cost and adjusted thereafter for the investor's share of the investee's profits or losses.