Which of the Following Statements Is FALSE

question 49

Multiple Choice

Which of the following statements is FALSE?

• A)Horizontal integration entails the merger of a firm and its supplier or a firm and its customer.
• B)Like insurance,hedging involves contracts or transactions that provide the firm with cash flows that offset its losses from price changes.
• C)For many firms,changes in the market prices of the raw materials they use and the goods they produce may be the most important source of risk to their profitability.
• D)Because an increase in the price of the commodity raises the firm's costs and the supplier's revenues,these firms can offset their risks by merging.

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Definitions:

Intellectual Capital

The intangible value of an organization made up of its knowledge, relationships, and human talent.

Structural Capital

Refers to the knowledge, processes, intellectual property, and systems that add value to an organization beyond the capabilities of its employees.

Human Capital

The collective skills, knowledge, and competencies of an organization's workforce that contribute to its value and competitive advantage.

Multicultural Teams

Work groups composed of members from diverse cultural backgrounds, bringing different perspectives and solutions to the team.