Regarding the Use of Funds Generated Within the Firm

question 181

Multiple Choice

Regarding the use of funds generated within the firm:

• A) Reinvesting cash generated from operations is usually more expensive than borrowing money.
• B) A company with a product that has significant growth potential should invest the earnings from that product to salvage declining products.
• C) Indirect distribution usually requires more investment capital for a producer than does direct distribution.
• D) When finances are tight, companies should look for strategy alternatives that help get a better return on money already invested.
• E) All of these.

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Definitions:

Bureaucratic Structures

Organizational forms that are characterized by a hierarchical arrangement of jobs, reliance on formal rules and regulations, and a clear distinction of labor.

Environmental Uncertainty

A lack of information regarding what exists in the environment and what developments may occur.

Strategic Alliance

A partnership between two or more companies to pursue a set of agreed upon objectives while remaining independent organizations.

Cooperative Structure

A framework within an organization where members work together towards common goals, often with shared responsibilities and decision-making.