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It Is a New Day at the Firm

question 40

Multiple Choice

It is a new day at the firm.Roark has been in place for a few weeks,strengthening the communications skills of his employees,getting them to work much better together.Now,the challenge that he faces is not an internal one;it lies with the client,which is increasingly incapable of sticking with decisions.Roark,based on his past experience with other clients like this,is afraid that the client will throw them a curveball and want to make changes late in the game-but that they also will be unwilling to absorb the costs of those changes.For this reason,which method of development will Roark eliminate?

Definitions:

Profit

The financial gain realized when the revenues generated from business activities exceed the expenses and costs associated with operating the business.

Unrealised Profit

Profits that have been earned but not yet realized through a transaction, such as an increase in the value of an investment that has not been sold.

Partial Goodwill Method

A method of accounting for a business combination where goodwill is only recorded in relation to the parent's share of ownership in the subsidiary.

NCI

Non-controlling interest (NCI) refers to the portion of equity interest in a subsidiary not owned directly or indirectly by the parent company.