CA Inter P6 · Chapter 13 · Question 5 of 11
Which of the following correctly orders retrenchment strategies from least drastic to most drastic?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Turnaround → divestment → liquidation
Explanation
Retrenchment strategies range in severity. Turnaround tries to reverse decline and restore the whole business. Divestment sells or closes a part of the business that cannot be saved or no longer fits. Liquidation, selling the firm's assets and ending the business, is the last resort.
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