A Local Firm Has Built a Successful Business but Acknowledges

question 10

Multiple Choice

A local firm has built a successful business but acknowledges it would be difficult to continue to compete with a large MNE. The MNE makes an offer to buy the local firm's interests, and the local firm accepts the offer. It is following the:

• A)​Contender strategy.
• B)​Extender strategy.
• C) ​Dodger strategy.
• D) ​Defender strategy.

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Definitions:

Interim Reporting

The financial reporting on a company's activities during a portion of the fiscal year, such as quarterly or semi-annual reports.

Inventory Procedures

Established methods for managing and controlling inventory levels, valuation, and turnover.

Gross Profit Method

An inventory valuation technique estimating the cost of goods sold and the ending inventory, based on the gross profit margin.

LIFO Liquidations

A situation where older inventory, costed at historical prices, is sold, potentially leading to an inflated profit margin due to lower cost of goods sold.