Question

Each product development project can be described as having a break-even point in time. This is the point on a plot of cumulative cash flow vs. time at which the curve rises to cross the axis at cumulative cash flow = 0 (zero). What is meant by the term 'break-even' in this context? Select the most accurate statement. (Choose one.) O a. The break-even point represents the time after product launch at which the annual profit earned rises to become equivalent to the target level set for the product. ob. The break-even point represents the time after product launch at which the cumulative sales volume rises to become equivalent to the development costs for the product. O c. The break-even point represents the time after product launch at which the annual sales volume rises to become equivalent to the target level set for the product. Od. The break-even point represents the time after product launch at which the cumulative profit earned rises to become equivalent to the development costs for the product.

Answer 1

Ans: The break-even point represents the time after product launch at which the cumulative sales volume rises to become equivalent to the development costs for the product.

Explanation: The time after the product launch when cumulative sales on net cash inflow are equal to net cash outflow. This is the time when the cost of development becomes zero and the organization starts booking profits. It is referred to as the payback period or the time in which cumulative returns equal cumulative costs.

Ans: True

Explanation: The authoritative style of leadership is more useful according to Goleman's study of leadership when the team needs a new vision because circumstances have changed and detailed guidance is required. It inspires an entrepreneurial spirit and a vibrant enthusiasm for the mission.

Ans: True

Explanation: In a matrix structure people are grouped both by product and function. The individual can be working on a particular product but his reporting might be to his functional head. In a functional structure, people are grouped according to their area of specialty with a clear reporting structure. In a matrix structure, the disadvantage is that authority is diffused and individuals might get confused because of dual reporting and complex reporting.

Ans: Option b: An inner circle decision-maker and direct report to the CEO

Explanation: A CTO focuses on organizational innovation through technology. The post is held by [person with broad technical expertise. The CTO is responsible for maintaining the organizational technological strategy, defining the parameters for new technological implementation, define the new requirements and communicate with the key stakeholders. A CTO does not have to report to a CEO or another C level executive.

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