Which of the Following Statements Are Correct

question 2

Multiple Choice

Which of the following statements are correct?
I.Going-concern value of a firm is equal to the present value of expected future cash flows to owners and creditors.
II.When an acquiring firm purchases a target firm's equity,the acquirer need not assume the target's liabilities.
III.The market value of a public company reflects the worth of the business to minority investors.
IV.The fair market value of a business is usually the lower of its liquidation value and its going-concern value.

• A) I and III only
• B) II and IV only
• C) II and III only
• D) I, II, and III only
• E) II, III, and IV only
• F) None of the above.

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Definitions:

Spending Variance

The difference between the actual expenditure and the budgeted amount.

Machine-Hours

A measure used to allocate manufacturing overhead costs to products based on the number of hours machines are used in the production process.

Spending Variance

A measure of the difference between the budgeted amount of expenses and the actual amount spent.

Flexible Budget

A flexible budget tailored to adjust as activity levels or volumes change.