Which of the Following Scenarios Supports the View That a Company

question 5

Multiple Choice

Which of the following scenarios supports the view that a company should engage in outsourcing?

• A)Zenith Corp., a publishing house, which needed a high capital investment to grow because it contracted most of its peripheral activities to other companies
• B)FRC Inc., an apparel company, which fears the loss of a strong hold over its prime activities if it does not perform them in house
• C)AutoLuxe LLC, an automobile company, which has the flexibility to contract processes to another company at a fast rate
• D)Innovator Inc., a software company, which foresees that its employees will have less work and more time under their disposal for leisure activities if it lets other suppliers help perform its activities

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Definitions:

Equity Financing

Funds invested in new ventures in exchange for part ownership.

Repay Borrowed

The act of returning money that was borrowed from a person or institution.

Equity Financing

A method of raising capital through the sale of shares in a company, thereby giving investors ownership interests.

Venture

A business enterprise involving risk in expectation of gain.