The Cisco Acquisition of Pure Digital Technologies, the Parent of the Flip

question 1

Multiple Choice

The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera, failed because

• A)Cisco had valuable competencies.
• B)the Flip division of Cisco was slow and less responsive to market pressures.
• C)consumers continued to purchase the camera.
• D)Cisco had good vision of the market.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the owners' claim on the business assets.

Assets

Economic resources owned or controlled by a business, expected to provide future benefits.

Monetary Unit Assumption

An accounting principle that assumes all transactions and financial statements are recorded in a single currency.

Cost Principle

An accounting principle that states all goods and services purchased by a business should be recorded at their cost price, rather than their current market value.