When a Company Decides to Expand into New Industries,it Must

question 72

Multiple Choice

When a company decides to expand into new industries,it must

• A) construct its business models at two levels.
• B) secure government approval from the Securities and Exchange Commission (SEC).
• C) select a new CEO.
• D) all of these choices.
• E) none of these choices.

Differentiate between various types of business centers such as cost, profit, and investment centers.

Recognize that a variety of factors, both financial and non-financial, can be considered in evaluating a department's performance.

Identify and allocate joint costs using different bases.

Understand the evaluation criteria for different departments.

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Definitions:

Debt Financing

The method of raising capital through the sale of bonds, bills, or notes to individuals or institutional investors which must be repaid at a later date.

Equity Financing

The process of raising capital through the sale of shares in a company.

Term

The time until a debt security’s principal is due to be repaid. Also called the debt’s maturity or time until maturity.

Indirect Transfers

Transactions where assets or money move between entities or locations via intermediaries rather than through a direct exchange.