Retrenching to a Narrower Diversification Base Can Be Attractive or Advisable

question 102

Multiple Choice

Retrenching to a narrower diversification base can be attractive or advisable when:

• A) certain businesses have questionable long-term potential.
• B) a diversified company has businesses that have little or no strategic or resource fits with the "core" businesses that management wishes to concentrate on.
• C) certain business units are weakly positioned and show poor prospects for providing a good return on investment.
• D) market conditions in a once-attractive business have badly deteriorated.
• E) All of these.

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Definitions:

Purchase Agreement

A legally binding contract outlining the terms and conditions for the sale and purchase of goods, services, or property.

Deed

A legal document that represents the ownership of property, transferring it from one party to another.

Mortgage

A loan specifically designed for the purchase of property, in which the property itself serves as security for the loan.

Lease

A contractual agreement by which one party conveys property, land, services, or goods to another for a specified time, usually in return for a periodic payment.