Mastery of dynamic capabilities is seen as a multistage process, composed of:
a. Exploring, seizing, reconfiguring and differentiating
b. Sensing, developing, reformulating and disseminating
c. Sensing, seizing, reconfiguring and transforming
d. Exploring, exploiting, transcending and developing
c. Sensing, seizing, reconfiguring and transforming
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Under the geographical and product division structures, for the company with French origins, France is:
A) the headquarter country market. B) simply another geographic market. C) a special unit of the European market. D) a divisional market in Europe. E) a product market in European Union.
Do not capitalize the first letter of __________ nouns
a. common b. familiar c. uncommon d. formal
A firm is evaluating a proposal which has an initial investment of $35,000 and has cash flows of $10,000 in year 1, $20,000 in year 2, and $10,000 in year 3. The payback period of the project is:
A) 1 year. B) 2 years. C) between 1 and 2 years. D) between 2 and 3 years.
Safeco Company and Risco Inc are identical in size and capital structure. However, the riskiness of their assets and cash flows are somewhat different, resulting in Safeco having a WACC of 10% and Risco a WACC of 12%. Safeco is considering Project X, which has an IRR of 10.5% and is of the same risk as a typical Safeco project. Risco is considering Project Y, which has an IRR of 11.5% and is of the same risk as a typical Risco project. Now assume that the two companies merge and form a new company, Safeco/Risco Inc. Moreover, the new company's market risk is an average of the pre-merger companies' market risks, and the merger has no impact on either the cash flows or the risks of Projects X and Y. Which of the following statements is CORRECT?
A. If the firm evaluates these projects and all other projects at the new overall corporate WACC, it will probably become riskier over time. B. If evaluated using the correct post-merger WACC, Project X would have a negative NPV. C. After the merger, Safeco/Risco would have a corporate WACC of 11%. Therefore, it should reject Project X but accept Project Y. D. Safeco/Risco's WACC, as a result of the merger, would be 10%. E. After the merger, Safeco/Risco should select Project Y but reject Project X. If the firm does this, its corporate WACC will fall to 10.5%.