QUESTION 11

1. Who is responsible for executing a diversified corporate strategy?

   	a.	Senior and business executives.
   	b.	Senior executives.
   	c.	Business unit executives.
   	d.	Functional executives.
   	e.	Senior and business executives along with functional managers.

4 points

QUESTION 12

1. Mergers and acquisitions are common in the airline industry. Mergers allow airlines to gain access to new routes, tangible assets such as airplanes and intangible assets such as human capital. The airline industry has a strong threat from suppliers, strong buyers and strong rivalry. In some cases, airline acquisitions occur when competitors declare bankruptcy. You have just acquired a bankrupt airline for Continental. Which is most likely true?

   	a.	The cost test is met, the better off test is met, and the attractiveness test is met.
   	b.	The cost test is met, the attractiveness test isnt met and the better off test is met.
   	c.	The cost test isnt met, the attractiveness test isnt met, and the better off test is met.
   	d.	The cost test isnt met, the attractiveness test isnt met, and the better off test isnt met.
   	e.	The cost test isnt met; the attractiveness and better off tests are met.

4 points

QUESTION 13

1. Honeywell and Allied Signal merged several years ago. Their intention was to share engineering expertise, the Honeywell brand, and to reduce costs by letting people go. How did they succeed?

   	a.	Brand sharing.
   	b.	Cost, brand, and expertise sharing.
   	c.	Cost sharing.
   	d.	Expertise sharing.
   	e.	Cost and brand sharing.

4 points

QUESTION 14

1. Facebook is interested in artificial intelligence. They believe it will allow their ads to be more successful producing significantly more revenue. Artificial intelligence has a steep learning curve. Original research is complicated and will take several years. There are small startups that have some success but their technology will cost around 100 million dollars. They could try to partner with one of the established companies but will be dependent on their help. What is the best choice?

   	a.	e. Alliance to increase speed to market.
   	b.	Develop it yourself to retain control.
   	c.	Alliance because it will be less expensive.
   	d.	Acquisition for speed to market and to retain control
   	e.	Dont diversify because it is unrelated to your business.

4 points

QUESTION 15

1. You are considering an acquisition in a new industry. You believe that the acquisition will produce growth in corporate revenues, diversify risk, and is inexpensive. What is the type of acquisition and which reason is incorrect for this acquisition.

   	a.	Related and Diversifies risk.
   	b.	Unrelated and the company is inexpensive to purchase.
   	c.	Unrelated and Stabilizes corporate earnings.
   	d.	Related and Growth in corporate revenues.
   	e.	Related and Target company is undervalued.