Which of the Following Statements Regarding Internal Development as a Means

question 4

Multiple Choice

Which of the following statements regarding internal development as a means of diversification is FALSE?

• A) Many companies use internal development to extend their product or service offers.
• B) An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services.
• C) The firm is able to capture wealth created without having to share the wealth with alliance partners.
• D) Firms can often develop products or services at a lower cost, if they rely on their own resources instead of external funding.

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Definitions:

Subjective Judgment

The use of personal opinions and feelings rather than external evidence or objective criteria to make decisions or evaluations.

Discounted Cash Flow

An appraisal technique that calculates an investment's worth by discounting its expected future cash flows to account for the time value of money.

Large Projects

Significant capital investments undertaken by a company to expand operations, enter new markets, or develop new products.

Net Operating Working Capital

Net Operating Working Capital is the difference between a company's operating current assets and its operating current liabilities, indicating short-term financial health.