Which of the Following Statements Is True Concerning Domestic Expansion

question 5

Multiple Choice

Which of the following statements is true concerning domestic expansion of a business?

• A)Cash funding requirements will be lower to establish a new corporation than a corporate division if the expansion activity incurs substantial start-up losses.
• B)Cash funding requirements will be higher to establish a new corporation than a corporate division if the expansion activity incurs substantial start-up losses.
• C)Obligations of a new division will have no impact on the founding corporation.
• D)The main advantage of incorporating an expansion activity is the use of start-up losses from the new corporation against income from the founding corporation.

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Definitions:

Glomerular Capsule

A cup-like sac at the beginning of the tubular component of a nephron in the kidney, involved in the filtration of blood to form urine.

Glomerulus

A cluster of capillaries within the kidney where blood filtration begins.

Renal Pyramids

Cone-shaped masses within the kidney that contain nephrons where urine formation takes place.

Hilum

The part of an organ where blood vessels, nerves, and other structures enter or leave.