The product life-cycle concept from microeconomics and marketing provides useful insights into the relations among cash flows from operating, investing, and financing activities. During the _____, net income usually reaches a peak, and working capital stops growing. Operations generate positive cash flow, enough to finance expenditures on property, plant, and equipment. Capital expenditures

Question

usually maintain, rather than increase, productive capacity. Firms use the excess cash flow to repay borrowing from the introduction and growth phases and to begin paying dividends to shareholders.
a. introduction phase
b. growth phase
c. mature phase
d. late maturity phase
e. decline phase

Answer 1

C