Which of the Following Would Be the Least Important Reason

question 114

Multiple Choice

Which of the following would be the least important reason for a company to merge with another company?

• A) To diversify risk.
• B) As a response to new government policy.
• C) To reduce labor costs.
• D) To increase stock prices.

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Definitions:

Condensed Income Statement

A simplified financial statement that summarizes revenues, costs, and expenses to show a company's net income over a specific period.

Discontinuance

The action of stopping the production or sale of a product or service, often as a result of strategic business decisions.

Fixed Costs

Costs that tend to remain the same in amount, regardless of variations in the level of activity.

Differential Cost

The difference in total cost that will result from selecting one alternative over another in a decision-making situation.