The Stability Strategy Is Appropriate for All of the Following

question 46

Multiple Choice

The stability strategy is appropriate for all of the following circumstances EXCEPT

• A) useful in the short-run but can be dangerous if followed too long.
• B) most appropriate for reasonably successful corporations in a reasonably predictable environment.
• C) when a firm is continuing its current activities without a significant change in direction.
• D) appropriate when the industry is in decline.
• E) popular with small business owners who have found a niche and are happy with their success.

---

Definitions:

Business Combination

A transaction or event in which an acquirer takes control of one or more businesses, such as through merger or acquisition.

Amortized

The process of gradually writing off the initial cost of an asset over a period, in accordance with its estimated useful life.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but not full control.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.