This Year C and D Formed a New Corporation

question 46

Multiple Choice

This year C and D formed a new corporation.C and D both contributed appreciated property, receiving 90 and 10 shares of the corporation's stock respectively.

• A)C must recognize gain.
• B)D must recognize gain.
• C)C and D must recognize gain.
• D)Neither C nor D must recognize gain.

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Definitions:

Long-Run Average Total Cost

The average cost per unit of output when all inputs, including those typically fixed, are variable and optimized.

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor, in contrast to fixed costs, which remain constant regardless of output levels.

Long-Run Average Total Cost Curve

A graphical representation that shows the lowest cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

Output

Output refers to the amount of goods or services produced by a firm or economy within a certain period.