The Reasons Why a Company Opts to Expand Outside Its

question 112

Multiple Choice

The reasons why a company opts to expand outside its home market include all of the following EXCEPT

• A) gaining access to new customers for the company's products/services.
• B) spreading its business risk across a wider market base.
• C) achieving lower costs through economies of scale, experience, and increased purchasing power.
• D) exploiting its core competencies and capabilities.
• E) identifying resources and capabilities in the company's home market.

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Definitions:

Incremental Value

The additional or added value created by undertaking a particular action or project, compared to not proceeding.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the present value of expected cash flows minus the initial investment.

Outstanding Shares

Shares of a company that are owned by investors, including restricted shares held by the company’s insiders.

Value Per Share

A measure reflecting the equity value of a company divided by its total number of outstanding shares, indicating what each share is worth.