Greenmax’s chief financial officer likes the idea of expanding into ma

QUESTION

Greenmax’s chief financial officer likes the idea of expanding into markets in the southern hemisphere because he argues that this will help the company generate a consistent year-round cash flow.

Which of the following, if true, strengthens the CFO’s argument?
A) Energy drinks are popular in many different parts of the world.
B) Demand for energy drinks is much greater in developed countries than in emerging markets.
C) Greenmax has tapped about as much of the energy drink market share in the United States as it can get.
D) The energy drink market in the southern hemisphere is dominated by the biggest-name brands.
E) Demand for energy drinks is heavily seasonal, with products selling much better at the hottest times of the year than others.

ANSWER

Answer: E
Explanation: E) Since the southern hemisphere has its hottest months during the times of the year when it is coolest in the northern hemisphere, selling Greenmax products to countries in both hemispheres would help generate even levels of sales revenue year-round. Choice A supports the idea that international markets can generate increased revenue but not consistent year-round cash flow. Choice B argues against expanding into the southern hemisphere since, broadly speaking, most of the world’s developed countries are in the northern hemisphere. Choice C says that the U.S. market is tapped but doesn’t address the issue of whether expanding to the southern hemisphere would help, whereas Choice D suggests that Greenmax would face an uphill climb as it took on established brands there.