The Two Most Compelling Reasons for a Company to Pursue

question 49

Multiple Choice

The two most compelling reasons for a company to pursue vertical integration (either forward or backward) are to

• A)expand into foreign markets and/or control more of the industry value chain.
• B)broaden the firm's product line and/or avoid the need for outsourcing.
• C)enable use of offensive strategies and/or gain a first-mover advantage over rivals in revamping the industry value chain.
• D)strengthen the company's competitive position and/or boost its profitability.
• E)achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain greater ability to reduce internal operating costs.

Understand the implications of NSF checks and bank service charges on cash management.

Calculate and interpret the Days' Cash on Hand ratio.

Understand the establishment and replenishment of a petty cash fund.

Recognize the importance of maintaining a minimum cash balance (compensating balances).

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