Why Might Chief Executives React Very Positively to Current Goodwill

question 2

Multiple Choice

Why might chief executives react very positively to current goodwill accounting?

• A)Goodwill increases in value.
• B)Goodwill is amortized creating expenses that reduce net income, enabling a company to pay less income tax.
• C)Its amortization increases earnings per share.
• D)Goodwill is no longer amortized so income is greater than prior accounting requirements.

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Definitions:

Crises of Trust

Situations where the foundational beliefs in the reliability, truth, ability, or strength of someone or something are severely challenged or broken.

Short-Term Personal Gain

Immediate benefits or advantages secured by an individual, often disregarding long-term consequences or ethical considerations.

Long-Term Good

The benefits or positive outcomes that are realized over an extended period.

Social Decision Schemes

Frameworks or rules that groups of individuals use to aggregate their preferences, views, or votes to reach a collective decision.