Due to Economic Regression in Freedonia, the Profitability of the Large

question 15

Multiple Choice

Due to economic regression in Freedonia, the profitability of the large corporation Happiness Products Inc. (HPI) was poor. An analysis of the company's business showed that the company could become profitable if it divested a few strategic business units under its banner. From which of the following businesses would HPI find it most easy to exit?

• A) the automobile industry, where the company has contractual obligations with suppliers
• B) the airline business, where the company's strategic commitments are long-term
• C) the e-commerce retail business, where investments on assets are low
• D) the pharmaceutical business, where the company has a large number of fixed costs

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Definitions:

Progesterone

Steroid hormone secreted by the corpus luteum and one of the hormones secreted by the placenta.

Ductus Arteriosus

A fetal blood vessel that allows blood to bypass the lungs, which closes soon after birth to establish the regular circulatory path.

Ductus Venosus

A fetal blood vessel that connects the umbilical vein to the inferior vena cava, allowing oxygenated blood from the placenta to bypass the liver and enter the systemic circulation.

Fetal Lungs

The lungs of a fetus, which are not used for breathing air but are critical for the development of the respiratory system.