A Specialty Original Equipment Manufacturer (OEM) to the Automobile Industry

A specialty original equipment manufacturer (OEM) to the automobile industry, has maintained an ROCE above 12% over the past four years by insisting on an ARR of over 12%. However, in the past four periods, consumer spending has begun to decline. Interest rates are falling. The company should

A) Expect ROCE to drop significantly given fewer high yield investment opportunities available during economic slow-down
B) Focus R&D efforts to develop recession proof or counter cyclical investment opportunities
C) Shift resources immediately from producing vulnerable products to more recession proof market offerings
D) Review current process and financing contracts to institute cost cutting procedures
E) Take advantage of a well diversified product portfolio to limit exposure