Which of the following business strategies is most likely to increase the net cash flows of a software developer in the short run but reduce them over a longer term?
A) Develop software that is more costly to create but easier to update and improve.
B) Lower the price of existing versions of products as customer demand begins to fall.
C) Reduce expenditures for the purpose of developing new products.
D) Purchase the building in which the business operates (assume the company currently rents this location).

Question

Quizplus · Accepted Answer

Reducing expenditures for developing new products can increase short-term cash flows by cutting costs, but it may harm long-term cash flows by stifling innovation and reducing future revenue potential.

Which of the Following Business Strategies Is Most Likely to Increase