When Unrelated Diversification Is Taken to the Extreme and There

question 34

Multiple Choice

When unrelated diversification is taken to the extreme and there are many unrelated businesses, the firm is referred to as a ________.

• A) monopoly
• B) conglomerate
• C) oligopoly
• D) cartel

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Definitions:

Use-It-Or-Lose-It

A principle emphasizing that not using a skill or capacity may lead to its gradual deterioration over time.

Operating Budget

An operating budget consists of all revenues and expenses over a specific period of time (usually fiscal year) that an organization expects to incur to carry out its planned activities.

Capital Budget

Capital Budget constitutes the planning and allocation of funds for significant long-term investments or expenditures that a company or organization undertakes to grow or maintain its business operations.

Cash Budget

A financial plan that estimates the income and expenditures of an entity over a specific period, often used to assess its liquidity and funding needs.