The Optima Mutual Fund has an expected return of 20%, and a volatility of 20%. Optima claims that no other portfolio offers a hi

Response:

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Answer: the potential options are:

A. A growth market corresponds to a differentiation-based strategy

B. A broadly-defined target market relates to a cost leadership strategy

C. A growth market is associated with a cost-based strategy

D. Technological innovation aligns with a cost-based strategy

Answer is B

Explanation:

Businesses employing a cost leadership strategy, alongside those utilizing a differentiation strategy, share a vital characteristic: both aim to appeal to a wide customer base. Their strategies to attract a diverse set of consumers contrast with approaches that focus on catering to a more specific niche. Such strategies are labeled focus strategies (Porter, 1980). A focused cost leadership strategy entails competing on prices to capture a NARROW MARKET. A firm adopting this strategy may not always offer the lowest prices in the industry; however, it sets lower prices in comparison to its competitors in the designated market segment. For instance, one might find milk cheaper at a large supermarket in their locality, while the neighborhood convenience store offers lower prices closer to home. Redbox exemplifies this concept; it rents DVDs for just $1 from vending machines located at supermarkets and other retail venues. Even cheaper options exist via Netflix's subscription-based streaming services, yet among DVD rental businesses, Redbox stands out with its exceptional prices and convenience.

The calculation is shown below; a. For Warranty Expense: Sales multiplied by Estimated Warranty Percentage% equals $4,144,400 × 0.87% = $36,056.28. b) The amount to be reported is as follows: Opening Balance of Estimated Warranty Liability as of Jan. 1, 2019 = $42,635, Less: Actual warranty costs in 2019 = ($26,750), Add: Warranty expense accrued in 2019 = $35,056, Closing Balance of Estimated Warranty Liability as of Dec. 31, 2019 = $50,941.