Use the Following to Answer the Questions

question 188

Multiple Choice

Use the following to answer the questions.
GE Transportation produces locomotive engines for sale in countries around the world.After looking at the total market for locomotive engines,the company found that different rail lines wanted engines.Major rail lines in the U.S.and South America wanted engines to haul heavy freight.Rail lines in Sweden and Germany were interested in a cleaner,greener locomotive engine.Rail lines operated by several Eastern European countries wanted locomotive engines for running short distances between cities in their own country.GE Transportation is currently manufacturing its GE 4400 for heavy freight,its Hybrid Eco-Engine,and its Dash 9,suited for shortline transport.
-Refer to Scenario 5.2.Researchers at GE Transportation estimate that 1,000 rail lines throughout the world will purchase some kind of locomotive engine next year.That number represents the

• A) company sales potential.
• B) breakdown approach.
• C) market potential.
• D) buildup approach.
• E) company sales forecast.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered or used but not yet paid for.

Cash Effect

The impact of transactions on the cash position of a company, including inflows and outflows.

Insurance Expense

The cost recognized in accounting for premiums paid on insurance policies covering various risks to a business.

Financing Activities

Transactions and events where cash is raised from or repaid to investors and creditors, such as issuing equity or borrowing.