Brian Company Purchased 40% of the Outstanding Shares of Wilson

question 63

Multiple Choice

Brian Company purchased 40% of the outstanding shares of Wilson Company as a long-term investment.At the end of the year the market value of the shares had increased. The increase in market value of Wilson Company shares will affect Brian Company by_____.

• A)increasing assets and stockholders' equity
• B)increasing stockholders' equity and investments
• C)increasing investments and cash
• D)having no effect

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Definitions:

Output

The total amount of goods or services produced by a company, industry, or economy during a given period.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced, representing the variable cost per unit of output.

Average Total Cost

The sum of all production costs divided by the quantity of output produced, essentially indicating the per-unit cost of production.

Marginal Cost

Marginal cost is the additional cost incurred by producing one more unit of a good or service, important for decision-making on production levels.