Conclusions About What the Priorities Should Be for Allocating Resources

question 87

Multiple Choice

Conclusions about what the priorities should be for allocating resources to the various businesses of a diversified company need to be based on such considerations as

• A) each business's profit and growth prospects.
• B) industry attractiveness and competitive strength of the various businesses.
• C) the degree of strategic fit and resource fit with other business units.
• D) each business's cash flow characteristics and return on capital invested.
• E) All of these.

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Definitions:

Physical Inventory Count

An assessment method where a business physically counts its entire inventory to verify stock records and accounts.

Perpetual Inventory System

An inventory management method where updates to inventory records are made in real-time following each receipt or sale of inventory items.

Periodic Inventory System

An inventory accounting system where the inventory is updated in the accounting records periodically, typically at the end of an accounting period, rather than after each transaction.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including material and labor expenses.