Which of the Following Statements Is FALSE

question 49

Multiple Choice

Which of the following statements is FALSE?

• A)Horizontal integration entails the merger of a firm and its supplier or a firm and its customer.
• B)Like insurance,hedging involves contracts or transactions that provide the firm with cash flows that offset its losses from price changes.
• C)For many firms,changes in the market prices of the raw materials they use and the goods they produce may be the most important source of risk to their profitability.
• D)Because an increase in the price of the commodity raises the firm's costs and the supplier's revenues,these firms can offset their risks by merging.

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Definitions:

General Partner

An owner of a partnership who has unlimited liability and is responsible for the management of the business.

Registered Partnership

A legally recognized form of partnership which is registered with the appropriate government authorities.

Limited Liability

The condition where a company's owners or shareholders are legally responsible for its debts only to the extent of the capital they invested.

Partnership Control

Partnership control refers to the governance or directive influence exercised by partners in a partnership, affecting decision-making and operations.