With a Strategy of Unrelated Diversification,an Acquisition Is Deemed to Have

question 38

Multiple Choice

With a strategy of unrelated diversification,an acquisition is deemed to have potential if it:

• A) can achieve financial returns.
• B) has the opportunity to generate positive cash flow.
• C) can pass the industry attractiveness test and the cost-of-entry test,and if it has good prospects for profit growth.
• D) can generate growth in revenue.
• E) can add economic value for managers.

---

Definitions:

West Indies

Another term for the Caribbean Islands, highlighting the region discovered by European explorers during their search for a westward route to India.

Maryland

One of the original 13 colonies in the United States, founded in 1632 as a haven for English Roman Catholics.

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people.

Shipbuilding

The construction of ships and other floating vessels, a critical industry for trade, transportation, and military purposes.