Which One of the Following Is Not a Reasonable Option

question 124

Multiple Choice

Which one of the following is not a reasonable option for deploying a diversified company's financial resources?

• A) Making acquisitions to establish positions in new businesses or to complement existing businesses
• B) Concentrating most of a company's financial resources in cash cow businesses and allocating little or no additional resources to cash hog businesses until they show enough strength to generate positive cash flows
• C) Funding long-range R&D ventures aimed at opening market opportunities in new or existing businesses
• D) Paying down existing debt, increasing dividends, or repurchasing shares of the company's stock
• E) Investing in ways to strengthen or grow existing businesses

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Definitions:

Straight-line Method

A technique in depreciation where the asset's cost is apportioned equally over its projected useful life.

Salvage Value

The projected remaining worth of an asset upon reaching the end of its operational lifespan, utilized to determine depreciation.

Lump-sum

A single payment made at a particular time, as opposed to several smaller installment payments.

Individual Assets

Specific items of property owned by an individual or entity, including tangible and intangible assets.