When a Corporation Pursues a Related Constrained Diversification Strategy, Financial

question 26

Multiple Choice

When a corporation pursues a related constrained diversification strategy, financial controls may not add value to strategy implementation efforts because it is difficult to:

• A) use them without reducing cooperation among divisional managers.
• B) transfer capital between units.
• C) maintain an arm's-length relationship between headquarters and the divisions.
• D) identify which objective criteria to monitor.

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Definitions:

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.

Withdraw

To remove something from consideration or usage, or to take money out of a bank account.

Invest Enough Money

The process of allocating adequate financial resources to opportunities, projects, or assets to achieve desired outcomes or returns.

Net Present Value Analysis

A method used in capital budgeting to evaluate the profitability of an investment or project by computing the present values of all cash flows related to it.