All of the Following May Be Justification for a Strategic

question 15

Multiple Choice

All of the following may be justification for a strategic alliance EXCEPT:

• A) takeover defense.
• B) a joint venture to pool resources for research and development.
• C) joint marketing and serving agreements.
• D) All of the above are legitimate reasons for strategic alliances.

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Definitions:

Payback Method

A capital budgeting technique that calculates the time required to recoup the initial investment through cash inflows.

Accounting Rate

Often refers to the accounting rate of return (ARR), a financial ratio used to measure the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

Investment Allowance

A tax benefit that allows businesses to deduct a percentage of certain capital expenditures from their taxable income.

Tax Deduction

Expenses subtracted from gross income to determine taxable income, which can reduce the amount of tax owed.