Diversification into New Industries Deserves Strong Consideration When a

question 73

Multiple Choice

Diversification into new industries deserves strong consideration when a

• A) single-business company can achieve profitable growth opportunities in its present industry.
• B) single-business company needs to develop a corporate-wide strategy.
• C) single-business company needs to develop a multi-line strategy.
• D) single-business company encounters diminishing market opportunities and stagnating sales in its principal business.
• E) multiple-business company encounters enhanced market opportunities and increasing sales in its principal business.

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Definitions:

IFRS

International Financial Reporting Standards are a set of accounting guidelines that govern how companies prepare and present their financial statements internationally.

Income

The money received, especially on a regular basis, for work, through investments, or from business activities.

Gains

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases in liabilities.

GAAP

GAAP, which stands for Generally Accepted Accounting Principles, is a set of accounting standards and conventions that guide how financial statements are prepared and reported.