Which One of the Following Is NOT Part of the Task

question 162

Multiple Choice

Which one of the following is NOT part of the task of checking a diversified company's business lineup for adequate resource fit?

• A) Determining whether the excess cash flows generated by cash cow businesses are sufficient to cover the negative cash flows of its cash hog businesses.
• B) Determining whether recently acquired businesses are acting to strengthen a company's resource base and competitive capabilities or whether they are causing its competitive and managerial resources to be stretched too thinly across its businesses.
• C) Determining whether some business units have value chain match-ups that offer opportunities to transfer skills or technology or intellectual capital from one business to another.
• D) Determining whether the company has adequate financial strength to fund its different businesses and maintain a healthy credit rating.
• E) Determining whether the corporate parent has or can develop sufficient resource strengths and competitive capabilities to be successful in each of the businesses it has diversified into.

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Definitions:

Expected Return

The anticipated profit or loss from an investment, considering both the probability and the impact of all possible outcomes.

Cost of Funds

The interest rate that financial institutions and other lenders charge each other for the use of money, as in loans or deposits.

Income

The financial gain received by an individual or entity, typically measured on a per year basis, from work, investments, or other sources.

Average Total Cost Curve

A graphical representation that shows the average cost of production per unit at different levels of output.