Multiple Choice QuestionRefer to Figure 16.1. Which one of these choices represents the highest risk for a business?Multiple choice question.Repair existing equipmentBuy new equipmentAdd to a product lineExpand into a new market
Question
Multiple Choice QuestionRefer to Figure 16.1. Which one of these choices represents the highest risk for a business?Multiple choice question.Repair existing equipmentBuy new equipmentAdd to a product lineExpand into a new market
Solution
The question asks for the highest risk for a business among the given choices.
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Repair existing equipment: This option might involve some risk, such as the possibility of the equipment breaking down again, but it's generally a low-risk option because it involves dealing with known quantities and costs.
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Buy new equipment: This option involves more risk because it requires a larger upfront investment. However, the risk is still relatively manageable because the business can research and plan for the costs involved.
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Add to a product line: This option involves even more risk because it requires not only an investment in creating the new product, but also in marketing it and potentially dealing with unknowns in the market.
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Expand into a new market: This option typically represents the highest risk. It involves many unknowns, including the response of potential customers, the competitive landscape, and regulatory requirements. It also requires a significant investment in marketing and possibly infrastructure.
So, the answer is "Expand into a new market".
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