Which of the Following Factors Encourage the Use of Decentralized

question 2

Multiple Choice

Which of the following factors encourage the use of decentralized decision making in subsidiary operations?

• A) Homogeneous product lines
• B) Low level of product diversification
• C) Weak volume-to-unit cost relationship
• D) High degree of technology

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's shares at certain times during its life, usually at the discretion of the bondholder.

Common Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell shares of a company's common stock at a set price before the option expires.

Corporate Capital Structure

The mix of debt, equity, and other securities that a company uses to finance its activities.