A Purchaser of the Assets of a Business Must Allocate

question 949

Multiple Choice

A purchaser of the assets of a business must allocate the purchase price to the individual assets in accordance with the written agreement between the purchaser and the seller. Which of the following assets would be least preferred for purposes of allocating value from the purchaser point of view?

• A) office building
• B) inventory
• C) goodwill
• D) equipment

Distinguish between absolute and relative measures of risk, such as standard deviation and coefficient of variation.

Understand the principles of portfolio theory and the relationship between risk and return.

Describe the concept of risk aversion and its implication for investors.

Explain the concepts of variance, standard deviation, and their role in risk assessment.

---

Definitions:

Net Sales

The amount of sales revenue remaining after deducting returns, allowances for damaged or missing goods, and discounts.

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including material and labor costs.

Liquidity Ratio

Financial metrics that measure a company's ability to meet its short-term obligations using its most liquid assets.