Question

A cash cow type of business Multiple Choice generates unusually high profits and returns on equity investment. is so profitable that it has no long-term debt. generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for financing new acquisitions, investing in cash hog businesses, funding share buyback programs, and/or paying dividends. is a business with such a strong competitive advantage that it generates big profits, big returns on investment, and big cash surpluses after dividends are paid. has good strategic fit with a cash hog business.

Answer 1

Answer:

generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for financing new acquisitions, investing in cash hog businesses, funding share buyback programs, and/or paying dividends.

Explanation:

In Economics, a cash cow business produces large internal cash flows over and above what is needed to build and maintain the business. On the other hand, the internal cash flows of a cash hog business are too small to fully fund its operating needs and capital requirements.

Hence, a cash cow type of business generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for financing new acquisitions, investing in cash hog businesses, funding share buyback programs, and/or paying dividends. Some examples of cash cow businesses are coca-cola, kellogg's corn flakes, Apple's iPhone, Microsoft Windows, Ford trucks, etc.