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The Following Are Characteristics of a Public Conglomerate

question 6

Multiple Choice

The following are characteristics of a public conglomerate:
I. they are designed to operate various divisions for the long run.
II. has an internal capital market where each division competes for funds.
III. a hierarchy of corporate staff evaluates divisions' plans and performance.
IV. divisional managers' compensation depends mostly on earnings of their respective divisions.


Definitions:

Investing Adjustments

Adjustments made in the accounting records related to investments in securities or fixed assets to reflect their fair values as of the financial statement date.

Indirect Method

An accounting practice used to prepare the cash flow statement, where net income is adjusted for non-cash transactions and changes in working capital to calculate cash flow from operating activities.

Net Income

The total revenue minus total expenses, representing the company's profit.

Operating Activities

These are the primary day-to-day activities of a business that relate to its production, sales, and deliveries of its products and services.

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