A Company May Purchase a Noncontrolling Interest in Another Firm

question 106

Multiple Choice

A company may purchase a noncontrolling interest in another firm in a related industry

• A) to house excess cash until needed.
• B) to generate earnings.
• C) for strategic reasons.
• D) for speculative reasons.

---

Definitions:

Substantive Conflict

A disagreement over issues key to the objectives and goals of a project or organization, potentially leading to functional outcomes if managed well.

Administrative Conflict

A disagreement or dispute arising within the context of the administrative functions of an organization, often involving issues of power, decision-making, or resource allocation.

False Sense

False sense refers to an incorrect or misleading perception or belief about a situation, often causing misjudgment or errors in decision-making.

Cooperative

An organization owned and operated by its members for their mutual benefit, often focusing on shared goals or interests.