Profits for one of Company

[RonPurewal]

choice E isn't relevant. the plan is simply to get rid of the products that don't have increasing profit margins—irrespective of what proportion of the company's budget is represented by those products.

[RonPurewal]

This makes me think which part to concentrate - the portion suggesting discontinue the product or the portion suggesting discontinue products not achieving increasing margins.

"not achieving increasing margins" is the only reason provided for discontinuing the product, so there is no difference between these two. they're the same.

[anirban.nitb]

Hello ... I got the same question in but with different options .. in that case the OA is D .. Can u please explain ... why ? The question with the options are as follows :

Profits for one of Company X's flagship products have been declining slowly for several years. The CFO investigated and determined that inflation has raised the cost of producing the product but consumers who were surveyed reported that they felt the product’s functionality didn’t justify a higher price. As a result, the CFO recommended that the company stop producing this product because the CEO only wants products whose profit margins are increasing.

The answer to which of the following questions would be most useful in evaluating whether the CFO's decision to divest the company of its flagship product is warranted?
1) Does the company have new and profitable products available with which to replace the flagship product?
2) Will the rest of Company X's management team agree with the CFO's recommendation?
3) Can Company X sell the flagship product to new markets to increase its customer base?
4) Are there additional features that could be added to the product without raising the unit price?
5) What percentage of Company X's revenues is represented by sales of the flagship product in question?

[Chelsey Cooley]

Can you offer a little more detail about your own thinking?