Faced with a Decline in Its Current Business,a Generic Drug

question 23

Multiple Choice

Faced with a decline in its current business,a generic drug manufacturer is planning a foray into design,and manufacture of re-locatable modular structures.Which diversification strategy is being employed by the company?

• A)Related diversification
• B)Backward integration
• C)Forward vertical integration
• D)Unrelated diversification

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Definitions:

Net Present Value (NPV)

The calculation of the current value of a series of future cash flows generated by an investment, minus the initial cost of the investment.

International Fisher Effect

A theory stating that the difference in nominal interest rates between two countries is equal to the expected change in the exchange rate between the two countries' currencies.

Absolute Purchasing Power Parity

The concept that, if transportation and transaction charges are eliminated, the price of identical items should be equivalent across countries when converted into a uniform currency.

Exchange Rate

The price at which one currency can be exchanged for another currency, influencing international trade and investment.