The Financial Motives for Merger Activity Include All of the Following

question 38

Multiple Choice

The financial motives for merger activity include all of the following except:

• A) the portfolio effect.
• B) improved financial posture and greater debt.
• C) the utilization of tax loss carry-forwards.
• D) vertical integration.

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Definitions:

Gain On Sale

The profit realized when an asset is sold for more than its book value.

Indirect Method

A way of presenting the cash flow statement that adjusts net income for changes in balance sheet accounts to calculate cash flow from operating activities.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded against a fixed asset since it was acquired, reducing its book value on the balance sheet.