An Acquisition of an Unrelated Business Is Deemed to Have

question 25

Multiple Choice

An acquisition of an unrelated business is deemed to have potential

• A)if it is aimed at achieving good financial fit (whereas related diversification aims at good strategic fit).
• B)if it can achieve at least existing profit margins into the near future.
• C)if it passes the competitive fit,financial fit,strategic relatedness,and value chain maximization tests
• D)if it has the opportunity to generate positive buzz in the industry,even if it may not be able to contribute to the parent firm's bottom line.
• E)if it can pass the industry attractiveness and cost-of-entry test,and if it has good prospects for profit growth.