Firms a and B Are Each Worth $50 Million,but Generate

question 77

Multiple Choice

Firms A and B are each worth $50 million,but generate a $20 million gain when merged.If the cost of the merger was $5 million,how much did firm A pay for firm B?

• A) $50 million
• B) $55 million
• C) $60 million
• D) $65 million

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Definitions:

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including materials, labor, and overhead.

Total Manufacturing Costs

The cumulative cost of materials, labor, and overhead expended on the production of goods.

Gross Profit

The difference between sales revenue and the cost of goods sold, representing the profit from buying and selling goods before administrative and other expenses.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a given period, including materials, labor, and overhead expenses.