Asked by Finance 2B Prasmul on Jun 28, 2024

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Refer to Table 17-6. Suppose the owners of Lopes and HomeMax meet for a friendly game of golf one afternoon and happen to discuss a strategy to optimize growth-related profit. If they both agree to cooperate on a strategy that maximizes their joint profits, annual profit will grow by

A) $1.0 million for Lopes and by $1.5 million for HomeMax.
B) $0.4 million for Lopes and by $3.4 million for HomeMax.
C) $3.2 million for Lopes and by $0.6 million for HomeMax.
D) $2.0 million for Lopes and by $2.5 million for HomeMax.

Optimize Growth

Refers to strategies or approaches aimed at maximizing the rate of growth of an economy, organization, or specific area of development.

Annual Profit

The total earnings or surplus of an organization, company, or individual after all expenses and costs are deducted from total revenues over one year.

Strategy Cooperation

A cooperative approach in strategic decision-making where entities align their strategies for mutual benefit.

  • Assess the role that collusion and cartels play in the evolution and results of market dynamics.
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Final Answer :
D
Explanation :
The correct answer is chosen based on the assumption that by cooperating, both companies can achieve a strategy that maximizes their combined profits. This typically involves finding a balance where both parties benefit significantly, rather than one benefiting at the expense of the other.