A Management Strategy Used to Reduce the Scale and Scope

question 69

Multiple Choice

A management strategy used to reduce the scale and scope of a business to improve its financial performance is

• A) divestiture.
• B) downsizing.
• C) acquisition.
• D) merger.

---

Definitions:

Initial Cash Outlay

This refers to the amount of money initially invested or spent to start a project or investment.

Market Value

The current price at which assets, securities, or a company can be bought or sold on the open market, reflecting the perceived value by investors.

Flotation Costs

The costs incurred by a company when issuing new securities, including fees such as underwriting fees, legal fees, and registration fees.

Pre-Tax Cost

The cost of a service or product before taxes are taken into account.