A strategic manager at Disney believes that the video-on-demand unit s

QUESTION

A strategic manager at Disney believes that the video-on-demand unit should be sold because the return it has made on Disney’s investment has been below Disney’s standards.

Which of the following, if true, most weakens the strategic manager’s conclusion?
A) Other units at Disney have earned even lower returns on investment than the video-on-demand unit has earned.
B) Video-on-demand is gaining in popularity over other methods of viewing videos.
C) Some companies demand lower returns on investment than Disney demands.
D) The video-on-demand unit uses a technology that was developed outside of Disney.
E) If Disney sold off its video-on-demand unit, the move would likely be seen as the start of a trend in the media world.

ANSWER

Answer: B
Explanation: B) The video-on-demand unit has earned less than Disney expects, but what about the future? If Choice B were true, then video-on-demand is likely to perform better in the future, which is a reason to keep it. Choice A says that other units have done worse, but that is not a reason to keep something that has performed poorly. Choice C says that some companies have different standards, but we have no reason to believe that those standards are appropriate for Disney. Choice D discusses where the technology was developed, which is irrelevant. The issue is performance, not origin. Choice E tells us about the effects of the sale but not whether the sale itself is a good thing.