Which Statement Is True About Products in the Sales Decline

question 117

Multiple Choice

Which statement is true about products in the sales decline stage of the product life cycle?

• A) Brand managers should phase-out this product as quickly as possible.
• B) A declining product may still be profitable for some time and it might be more appropriate to phase-out this product gradually.
• C) Customers will always abandon the declining product immediately if an alternative is available.
• D) Phasing-out a product at this time is fairly easy and this strategy will cut future losses.
• E) None of these statements about the sales decline stage is true.

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Definitions:

Negative Net Cash Flow

A financial situation where a company's cash outflows exceed its cash inflows for a specific period, indicating potential financial trouble.

Issue Of Bonds

The process by which a borrower issues bonds to lenders or investors as a way of raising capital.

Amortization Expenses

The gradual write-off of the initial cost of intangible assets over a period of time, reflecting their consumption, expiration, or obsolescence.

DPS

Stands for Dividends Per Share, indicating the total dividends paid out by a company per share of its stock.