Which of the Following Is a TRUE Statement Pertaining to a Bargain

question 34

Multiple Choice

Which of the following is a TRUE statement pertaining to a bargain purchase?

• A) A bargain purchase occurs when the total consideration is less than the net book value of the subsidiary's identifiable net assets.
• B) A bargain purchase occurs when the total consideration is less than the fair market value of the subsidiary's identifiable net assets.
• C) A bargain purchase occurs when the total consideration is greater than the fair market value of the subsidiary's identifiable net assets.
• D) A bargain purchase occurs when the total consideration is greater than the net book value of the subsidiary's identifiable net assets.

---

Definitions:

Comparative Advantage

The ability of an entity to produce a good at a lower opportunity cost than another entity, leading to potential gains from trade.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than competitors, using the same amount of resources.

Resource Endowments

These are the natural, human, and technological resources available to a country or region, crucial for economic development.

Comparative Advantage

A concept in economics that refers to a country's ability to produce goods and services at a lower opportunity cost than that of trade partners.