A Company That Enters a New Business Area in Order

question 90

Multiple Choice

A company that enters a new business area in order to leverage existing expertise and achieve synergy across the newly combined set of products is following a ________ strategy.

• A)related diversification
• B)international expansion
• C)focused low-cost
• D)concentration on a single industry
• E)unrelated diversification

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Definitions:

Liabilities

Financial obligations or debts a company owes to others, which must be settled in the future by transfer of assets, provision of services, or other forms of economic benefit.

Capital

Refers to financial assets or resources that individuals, companies, or governments use to fund their operations and invest in their own growth.

Classification

The systematic arrangement of business transactions or accounts into categories for reporting and analysis purposes.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance based on accounting rules.