Broston Inc

question 19

Multiple Choice

Broston Inc., a bottling company, has state-of-the-art bottling and capping equipment in its manufacturing unit. The manufacturing unit is capable of producing double the quantity than required for the domestic market. The company plans to venture into the global market in order to maximize the utilization of the bottling plant and generate more revenue. This scenario reflects the concept of the _____.

• A) theory of computation
• B) theory of economies of scale
• C) theory of spontaneous generations
• D) theory of the international product life cycle

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Definitions:

Statement of Financial Position

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Identifiable Assets

Identifiable assets are those assets of an acquired company that can be separated from the company and sold, transferred, licensed, rented, or exchanged, including assets that can be contractually used or shared.

Contingent Liabilities

Possible liabilities that depend on the outcome of a future event, not recognized as liabilities on the balance sheet unless both probable and measurable.

Pre-acquisition Equity

Refers to the equity interest in a company that exists before it is acquired by another entity.