Which of the Following Is NOT One of the Sources

question 80

Multiple Choice

Which of the following is NOT one of the sources of value enhancing synergy in a merger?

• A) Revenue enhancement
• B) Cost reduction
• C) Tax considerations
• D) Higher cost of capital

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Definitions:

Variable Expenses

Costs that change in proportion to the level of activity or volume of production in a business.

Sales

The total revenue generated from goods or services sold by a company during a specific period.

Contribution Margin Ratio

The ratio of contribution margin to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and generate profit.

Break-even Point

The level of sales at which total revenues equal total costs, resulting in no profit or loss.