Which Strategy Should Be Implemented When a Division Is Responsible

question 38

Multiple Choice

Which strategy should be implemented when a division is responsible for an organization's overall poor performance?

• A) Backward integration
• B) Divestiture
• C) Forward integration
• D) Cost leadership
• E) Related diversification

---

Definitions:

Capital Lease

A lease classified as a purchase by the lessee for accounting purposes, as it transfers substantially all risks and benefits of ownership.

Present Value

The value today of a sum of money to be received in the future, or a series of future payments, based on a chosen rate of return.

Minimum Lease Payments

The lowest amount that a lessee is expected to pay over the lease term, as specified in a lease agreement.

Leased Asset's Fair Value

The estimated market value of an asset under lease, which should represent what the asset would sell for in an arm's length transaction.