Identify an Accurate Comparison Between Small Businesses and Large Businesses

question 110

Multiple Choice

Identify an accurate comparison between small businesses and large businesses.

• A) Small businesses are better than large businesses in identifying niches.
• B) Small businesses can compete better on the basis of economies of scale than large businesses.
• C) Small businesses perform better than large businesses in manufacturing industries.
• D) Small businesses dominate high-investment industries more than large businesses.
• E) Large businesses are usually better at identifying new markets than small businesses.

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Definitions:

Tax Book Value

Refers to the value of an asset or liability for tax purposes, distinguished from the actual market value or the value recorded on financial statements.

Depreciable Asset

An asset whose cost is gradually deducted over its useful life due to wear and tear, decay, or obsolescence.

Acquisition Cost

The total cost involved in acquiring an asset, including the purchase price and other expenses such as legal fees, installation charges, and transportation.

After-Tax Cash Flows

Cash flow from operations after adjusting for taxes, representing the actual cash a firm has after tax obligations.