Once a Company Has Diversified into a Collection of Related

question 32

Multiple Choice

Once a company has diversified into a collection of related or unrelated businesses and concludes that some strategy adjustments are needed,which one of the following is not one of the main strategy options that a company can pursue?

• A)Stick closely with the existing business lineup.
• B)Restructure the company's business lineup.
• C)Craft new initiatives to build or enhance the company's reputation.
• D)Divest some businesses and retrench to a narrower diversification base.
• E)Broaden the diversification base.

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Definitions:

Prepaid Rent

An asset account that represents rent payments made in advance of the rental period.

Rent Expense

The cost incurred by renting property or equipment for business or personal use, typically recognized in accounting over the rental period.

Expected Life

The anticipated duration a fixed asset is likely to be useful in business operations before needing replacement.

Residual Value

The anticipated price that an asset will fetch at the time of its disposal, following the conclusion of its useful lifespan.