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

Prepare contribution format and traditional format income statements.

Calculate variable and fixed costs at different activity levels.

Understand the distinction between product costs and period costs.

Compute average costs per unit for variable, fixed, and total costs within the relevant range.

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Definitions:

Homogenization

A process by which differences among elements are minimized, making them uniform or similar, often used in contexts such as culture, milk processing, and societal integration.

Regionalization

The division of an area into smaller regions or the tendency of countries to form regional alliances for economic, social, or political purposes.

Modernization Theory

A theory suggesting that as societies develop, they will follow a similar path of development to those of more developed countries, emphasizing the role of technology and economic growth.

Dependency Theory

A theory suggesting that economic conditions in developing countries are largely influenced by their dependence on and relationships with developed countries.