To Test Whether a Particular Diversification Move Has Good Prospects

question 103

Multiple Choice

To test whether a particular diversification move has good prospects for creating added shareholder value, corporate strategists should use

• A) profit test, the competitive strength test, the industry attractiveness test, and the capital gains test.
• B) better-off test, the competitive advantage test, the profit expectations test, and the shareholder value test.
• C) barrier-to-entry test, the competitive advantage test, the growth test, and the stock price effect test.
• D) strategic fit test, the industry attractiveness test, the growth test, the dividend effect test, and the capital gains test.
• E) attractiveness test, the cost of entry test, and the better-off test.

Calculate the contribution margin ratio and understand its significance in CVP analysis.

Determine the break-even point in units and dollars.

Recognize the impact of changes in cost structures and sales on the break-even point and profitability.

Understand the concept of operating leverage and its effects on profitability.

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Definitions:

Low-Context

refers to communication styles where messages are explicit, direct, and detailed, typically requiring less interpretation based on contextual clues.

Explicitly

In a clear and detailed manner, leaving no room for confusion or doubt.

Meanings of Words

The definitions or interpretations attributed to words, which can vary depending on context.

Social Style

A person's characteristic way of interacting with others, influenced by personality and societal norms.