Which of the Following Statements Is a Downside of Unrelated

question 38

Multiple Choice

Which of the following statements is a downside of unrelated diversification strategy?

• A) It does not allow a dying company to use capital generated in a profitable division to prop it up for a short period of time.
• B) A firm cannot manage multiple businesses without any reasonable connections.
• C) It is not possible to achieve financial economies.
• D) It can open a firm to higher levels of risk and uncertainty.

Calculate and interpret the times interest earned ratio to assess interest payment capacity.

Understand operating cycle calculations to manage cash flow effectively.

Evaluate the equity multiplier to understand the level of financial leverage.

Determine the average collection period to assess the effectiveness of credit policies.

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Definitions:

Small Intestine

Portion of the vertebrate digestive tract that extends from the stomach to the large intestine.

Lungs

Lungs are a pair of respiratory organs in the chest of vertebrates where blood is oxygenated.

Elastic Fibers

Protein fibers in connective tissue that have the ability to stretch and return to their original shape, contributing to the elasticity of organs and tissues.

Reticular Fibers

Fine, branching fibers composed of collagen and glycoproteins, forming a supportive network in various tissues.