Two divisions of a company decide to consolidate manufacturing facilities to maximize supplier discounts, optimize inventory management, and reduce fixed costs. This is an example of
A. differentiation.
B. vertical integration.
C. synergy.
D. hypercompetition.
E. diversification.
Answer: C
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Data from Lheureux Corporation's most recent balance sheet and the company's income statement appear below: Year 2Year 1Total assets$1,440 $1,480 Total liabilities$400 $450 Total stockholders' equity$1,040 $1,030 Income StatementFor the Year Ended December 31, Year 2(in thousands of dollars)Sales (all on account)$1,280 Cost of goods sold 850 Gross margin 430 Selling and administrative expense 355 Net operating income 75 Interest expense 18 Net income before taxes 57 Income taxes (30%) 17 Net income$ 40 The times interest earned ratio for Year 2 is closest to:
A. 4.17 B. 5.95 C. 2.22 D. 3.17
Which assertions may be tested for the "account balances" category of management assertions?
A. Occurrence, accuracy, rights and obligations, completeness. B. Existence, cutoff, rights and obligations, completeness. C. Existence, rights and obligations, completeness, accuracy, valuation, allocation, and classification. D. Occurrence, rights and obligations, completeness, valuation and allocation.
The most obvious risk to bond investors is that a company will fail and be unable to pay its debts
a. True b. False Indicate whether the statement is true or false
A $500,000, 5% bond issue was sold at face value and later redeemed at 104% of face value. The corporation would have a
a. gain of $20,000; b. loss of $20,000; c. loss of $25,000; d. gain of $25,000; e. none of these.