Day: October 18, 2017

Business Studies Multiple Choice Question – 18 October 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

In the figure below, Product A is a?

Diagram 03

Select ONE answer:

  1. Dog
  2. Cash cow
  3. Star
  4. Problem child
  5. Panther

What actions are firms likely to take with this type of product?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 1 – Dogs are products with low market share in a mature, slow-growing industry. These products typically “break even”, generating barely enough cash to maintain the business’s market share. Though owning a break-even product might provide the social benefit of providing jobs and possible synergies that assist other products, they are from an accounting point of view such a product is worthless, by not generating cash for the company. They depress a profitable company’s return on assets ratio, which is used by many investors to judge how well a company is being managed. Dogs should if possible be sold off.

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