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:

Credit Balance

The amount of money in a financial repository that surpasses the debit balance and is available for use.

Consolidated Goodwill

The excess value of purchase price over the fair market value of identifiable assets and liabilities acquired during consolidation.

Common Stock

An equity security representing ownership in a corporation, entitling holders to a share of the corporation's residual assets and earnings.

Acquisition Transaction

A financial deal or agreement in which one company takes control of another company, either through a direct purchase of its shares or assets.