Question

Jacob is assessing the corporate life cycle of two companies. He notices that Monaco Enterprises is purchasing many long-term assets and that Resendez Industries is selling many long-term assets. What should Jacob conclude about these two companies?

A) Monaco Enterprises is in the maturity phase, whereas Resendez Industries is in the growth phase.
B) Monaco Enterprises is in the introductory phase, whereas Resendez Industries is in the decline phase.
C) Monaco Enterprises is in the decline phase, whereas Resendez Industries is in the maturity phase.
D) Monaco Enterprises is in the growth phase, whereas Resendez Industries is in the introductory phase.

Answer 1

Monaco Enterprises is purchasing long-term assets indicating its growth phase, while Resendez Industries is selling long-term assets, suggesting it's in the decline phase.

Step-by-step explanation:

Jacob, by analyzing the corporate life cycles of two companies, can draw conclusions on their respective stages of development. A company purchasing many long-term assets, like Monaco Enterprises, typically indicates that it is in the growth phase, investing in its expansion and development. In contrast, a company selling off many long-term assets, as Resendez Industries is doing, suggests it may be in the decline phase, possibly downsizing and divesting resources as it restructures or prepares to leave the market. Therefore, based on the actions of these businesses, Jacob should conclude B) Monaco Enterprises is in the introductory phase, whereas Resendez Industries is in the decline phase.