The Cost-Of-Entry Test for Evaluating Whether Diversification into a Particular

question 67

Multiple Choice

The cost-of-entry test for evaluating whether diversification into a particular industry is likely to build shareholder value involves determining whether

• A) a newly entered business presents opportunities to cost-efficiently transfer competitively valuable skills or technology from one business to another.
• B) the cost to enter the target industry will strain the company's credit rating.
• C) a company's costs to enter the target industry are so high that the potentials for good profitability and return on investment are eroded.
• D) the cost to enter the target industry will raise or lower the company's total profits.
• E) the cost a company incurs to enter the target industry will raise or lower production costs.

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Definitions:

Engagement Programs

Initiatives designed to actively involve participants, such as students, employees, or community members, in activities that foster involvement, learning, or loyalty.

Social Skills

The abilities necessary for effective interpersonal interactions, such as communication, empathy, and conflict resolution.

Culturally Biased

Refers to the tendency of assessments or perceptions to reflect the norms, values, or prejudices of one culture over others, potentially leading to misunderstanding or discrimination.

Exclusive

implies strictly limited access or availability to a particular group or individual, often associated with a high level of selectivity.