Business analysts were reviewing the sales statistics for two companies with the goal of determining which company would be the best for investment purposes.Company A had annual profits of $1 million a year at its five-year mark with profits increasing annually for five additional years to profits of $1.2 million.Company B had annual profits of $10,000 at its five-year mark,but profits increased annually for five additional years to $100,000 with these numbers climbing annually.Which of the following is most likely in light of these profit figures?
A) Company A has greater access to capital than Company B.
B) Company A has most likely expanded its operations over five years by selling new items or selling in new markets.
C) The leadership of Company B has less status than Company A.
D) Company A has greater sales than Company B.

Question

Quizplus · Accepted Answer

Company A started with higher profits and continued to increase profits annually, indicating potential growth through market expansion or new product lines. Meanwhile, Company B started with lower profits but showed significant annual growth, likely due to the development of new products or expansion into new markets. This suggests that Company B has good growth potential and may be a better investment choice. Choices A, C, and D are not supported by the given profit figures.

Business Analysts Were Reviewing the Sales Statistics for Two Companies