Synergy Exists When

question 3

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 the units create when working independently

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values deviate from the mean.

Measure Of Central Tendency

A statistical concept that provides a single value as an estimate of the center of a distribution of values, commonly calculated as the mean, median, or mode.

Outlier

Numbers in a data set that are extreme values; calculate outliers in a data set by multiplying 1.5 times the IQR; subtract this product from Q1 to compute the boundary for lower outliers and add this value to Q3 to compute the boundary for upper outliers.

Average Bill

Refers to the mean amount charged for a service or product over a specified period, often used to estimate monthly or yearly expenses.