Which of the following statements regarding the level of demand for the goods sold or services provided by companies is correct?
A) If a client's products or services are seasonal, this will affect revenue flow.
B) If a client operates in an industry subject to changing trends, the client does not risk inventory obsolescence.
C) If a client's products or services are seasonal, this will not affect revenue flow.
D) When a product or process is subject to technological change, there is never a risk that the client will be left behind by its competitors.

Question

Quizplus · Accepted Answer

Seasonality can significantly impact a company's revenue flow. For example, if a company sells swimsuits, their revenue will likely be higher in the summer months and lower in the winter months. This can create cash flow challenges for the company.

Answer: B is incorrect because, in industries subject to changing trends, inventory obsolescence is a considerable risk.

Answer: C is incorrect because seasonality can impact revenue flow.

Answer: D is incorrect because technological change can pose a risk of being left behind by competitors. For example, if a company is relying on outdated technology, a new competitor that has embraced newer technology may have an advantage in terms of efficiency and cost-effectiveness.

Which of the Following Statements Regarding the Level of Demand