When Calculating Industry Attractiveness Scores,to Produce a Valid Response It

question 57

Multiple Choice

When calculating industry attractiveness scores,to produce a valid response it is necessary to

• A)master the ability to hurdle barriers to entry,value chain attractiveness,and business risk.
• B)calculate the cost reduction potential,customer satisfaction potential,and comparisons of annual cash flows from operations
• C)enumerate the relative number of competitive capabilities,the number of products in each business's product line,which businesses have the highest/lowest market shares,and which businesses earn the highest/lowest profits before taxes.
• D)employ outside analysts to make an educated guess if the available information is skimpy.
• E)ensure the appropriate weights are assigned to each measure and that the preparer has sufficient knowledge to rate the industry on each attractiveness measure.

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Definitions:

Closing Entry

A journal entry made at the end of an accounting period to transfer temporary accounts to permanent accounts and prepare the books for the next period.

Real Account

Another term for permanent account in accounting, referring to accounts that are not closed at the end of the accounting period and carry their ending balance into the next period.

Nominal Account

A nominal account is a temporary financial account that shows the incomes, gains, expenses, or losses over an accounting period, and is reset to zero at the beginning of each new period.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in net income or loss.