Why Is Following an Unrelated Diversification Strategy Especially Advantageous in an Emerging

question 72

Multiple Choice

Why is following an unrelated diversification strategy especially advantageous in an emerging economy?

• A) It allows the conglomerate to overcome institutional weaknesses in emerging economies.
• B) It allows the conglomerate to form a monopoly in emerging economies.
• C) It allows the conglomerate to use well-defined legal systems in emerging economies.
• D) It allows the conglomerate to take advantage of strong capital markets in emerging economies.

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Definitions:

Net Operating Income

Net Operating Income (NOI) is a measure of a company's profitability from its core business operations, excluding expenses and revenues from financing and investing activities.

Absorption Costing

Absorption costing is an accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Net Operating Income

A measure of a company's profitability from its core business operations, excluding deductions of interest and taxes.

Absorption Costing

A costing method that includes all manufacturing costs - both fixed and variable - in the cost of a product.