Question

Why did it make sense for big corporations to continue operating during poor economic times?

1) They had enough reserves to sustain losses
2) They had a diversified portfolio
3) They could take advantage of distressed assets and acquire them at lower prices
4) All of the above

Answer 1

Big corporations may continue operating during poor economic times due to having enough reserves, a diversified portfolio, and the ability to acquire distressed assets at lower prices.

Step-by-step explanation:

In poor economic times, big corporations may choose to continue operating for several reasons:

1. They often have enough reserves to sustain losses. This means that even if they are not making a profit, they have enough money saved up to cover expenses and stay afloat.
2. Big corporations also tend to have a diversified portfolio. This means that they have invested in a variety of industries and sectors, reducing their risk and increasing their chances of making money even during tough times in one particular sector.
3. Lastly, they can take advantage of distressed assets and acquire them at lower prices. During poor economic times, some smaller companies may struggle and be forced to sell their assets at a discount. Big corporations can swoop in and acquire these assets, expanding their own operations at a lower cost.

So, the correct answer is 4) All of the above.

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Answer 2

Big corporations often continue operating during poor economic times due to their enough reserves, diversified portfolio, and ability to acquire distressed assets at lower prices. Option 4 is correct.

Step-by-step explanation:

Big corporations often continue operating during poor economic times for several reasons:

1. They had enough reserves to sustain losses: Big corporations typically have significant financial reserves that can help sustain them during downturns in the economy. These reserves can be used to cover losses, pay debts, and keep the business running.
2. They had a diversified portfolio: Big corporations usually have a diverse range of business operations and investments. This diversification helps spread the risk across multiple sectors, reducing the impact of poor economic conditions in any one area.
3. They could take advantage of distressed assets and acquire them at lower prices: Poor economic times often result in distressed assets being sold at discounted prices. Big corporations with strong financial positions can take advantage of these opportunities to acquire valuable assets, expand their business, or strengthen their market position.

Therefore, the answer to why it makes sense for big corporations to continue operating during poor economic times is Option 4: All of the above.