A Total Profit Approach to Evaluating Product-Market Strategic Plans

question 5

Multiple Choice

A total profit approach to evaluating product-market strategic plans

• A) will not work if the plans are for the same number of years.
• B) will be most useful when the plans require very different levels of investment.
• C) may support a particular plan even if it generates poor profits in some years.
• D) does not include sales and costs incurred in the first year of the plan.
• E) None of these are good answers.

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Definitions:

Retained Earnings

The portion of net earnings not distributed as dividends to shareholders, but retained by the company for reinvestment.

Appropriations

Funds set aside by a legislative body for a specific purpose, often referring to government budgeting.

Retained Earnings

The portion of net earnings not distributed to shareholders, instead reinvested in the core business or used to pay off debt.