Bob Boyd Is Developing an Exit Strategy for His Sporting

question 60

Multiple Choice

Bob Boyd is developing an exit strategy for his sporting goods business, since he plans to retire within the next three years. Bob knows that one of the company's greatest strengths is that there is a core group of motivated employees who have been with the company for years. Based on this information, which exit strategy would be the best option for Bob?

• A) sell to a strategic buyer
• B) sell to a key employee or group of employees
• C) take the company public
• D) undertake a planned liquidation

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Definitions:

Productive Efficiency

A situation where an economy or a production process is operating in such a way that it could not produce more of one good without producing less of another.

Profit-Maximizing

This is the process by which a company adjusts its production levels and pricing strategies to achieve the highest possible profit.

Short Run

A period in which at least one input is fixed and cannot be changed by the firm.

Economies Of Scale

The advantages in cost that enterprises gain by scaling up their operations, usually seen as a decrease in the per-unit cost of output as production scales up.