Which One of the Following Statements Is Correct

question 41

Multiple Choice

Which one of the following statements is correct?

• A) The IRS automatically approves acquisitions that are primarily designed to lower federal taxes.
• B) The leverage associated with an acquisition increases the tax liability of the acquiring firm.
• C) A firm may benefit from an acquisition if it can lower its capital requirements.
• D) Firms can always benefit from economies of scale if they increase the size of their firm through acquisitions.
• E) If a firm uses its surplus cash to acquire another firm, then the shareholders of the acquiring firm immediately incur a tax liability related to the transaction.

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Definitions:

Master Trait

A dominant characteristic or quality that significantly shapes an individual's behavior and identity.

Unconscious Forces

Psychological forces not present in conscious awareness but influencing emotions, behavior, and thoughts.

Superego

In psychoanalytic theory, the part of the personality that acts as the moral center, enforcing ethical conduct and societal norms.

Motives

The reasons behind an individual's actions, desires, and needs which drive their behavior.