Which of the Following Is NOT a Reason for the Emergence

question 81

Multiple Choice

Which of the following is NOT a reason for the emergence of multi-business companies?

• A) Companies can enter businesses with greater growth potential
• B) Companies can enter businesses with different cyclical considerations
• C) Companies can diversify inherent risks
• D) Companies can slow their internal growth

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Definitions:

Sale and Leaseback

A financial transaction where one sells an asset and leases it back for the long-term; thus, one continues to be able to use the asset but does not own it.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific point in time, detailing assets, liabilities, and equity.

Incremental Cash Flows

The additional cash flow generated by a company as a result of undertaking a new project or investment.

Operating Lease

A lease agreement for the use of an asset without transferring ownership, typically involves short-term leases of equipment or property.