The Three Tests for Judging Whether a Particular Diversification Move

question 54

Multiple Choice

The three tests for judging whether a particular diversification move can create value for shareholders are the

• A)attractiveness test, the profitability test, and the shareholder value test.
• B)strategic fit test, the competitive advantage test, and the return-on-investment test.
• C)resource fit test, the profitability test, and the shareholder value test.
• D)attractiveness test, the cost of entry test, and the better-off test.
• E)shareholder value test, the cost of entry test, and the profitability test.

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Definitions:

Clattering

The act of making a series of loud, rattling sounds, as when objects strike against each other.

Hue

A color or shade, the aspect of color which is determined by the wavelength of light.

Wavelength

The distance between successive crests of a wave, especially points in a sound wave or electromagnetic wave, which determines its color and energy.

Physical Characteristics

The observable attributes or features of an organism, such as height, eye color, and body type.