Synergy Exists When

question 114

Multiple Choice

Synergy exists when:

• A) cost savings are realized through improved allocations of financial resources based on investments inside or outside the firm.
• B) two units create value by utilizing market power in their respective industries.
• C) firms utilize constrained related diversification to build an attractive portfolio of businesses.
• D) the value created by business units working together exceeds the value that those same units create when working independently.

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Definitions:

Manufacturers

Companies or individuals that produce finished goods from raw materials through the use of various tools, equipment, and processes.

Disaster Risk

The potential loss or damage that can occur due to natural or man-made disasters.

Super-Event Probability

An estimation of the likelihood of a composite event, taking into account the probabilities of multiple subordinate events.

Simultaneously

Occurring, operating, or done at the same time.