A Firm Must Evaluate Segments Based on Their Attractiveness; Identify

question 143

Essay

A firm must evaluate segments based on their attractiveness; identify the five criteria and explain how a firm would use this information to establish whether a segment is worth pursuing.

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Definitions:

Automatic Extension

An extension of time granted by the IRS for filing tax returns without needing to file a request form.

C Corporation

A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity.

Return

A document containing details about an individual's or entity's income, deductions, and tax liabilities filed with the tax authorities.

Basis

The initial value of an asset for tax purposes, used to calculate depreciation, amortization, and determines the gain or loss on the asset's sale.