Synergy Exists When

question 9

Multiple Choice

Synergy exists when:

• A)two units are combined into one
• B)two units create value by utilising market power in their respective industries
• C)firms utilise 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:

Direct Expense

Direct expense refers to costs that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Shoe Department

A specific section within a store or company dedicated to the sale and display of shoes.

Building Expenses

Costs associated with the maintenance, repair, and running of a building.

Allocation Base

A criterion or measure used for distributing costs or expenses across different departments or products.