Which One of the Following Statements Is Correct

question 20

Multiple Choice

Which one of the following statements is correct?

• A)Firms with large net operating losses tend to be acquiring firms rather than target firms.
• B)The leverage associated with an acquisition increases the tax liability of the acquiring firm.
• C)If either an increase or a decrease in the level of production causes the average cost per unit to increase then the firm is currently operating at its optimal production level.
• D)Firms can always benefit from economies of scale if they increase the size of their firm through acquisitions.
• E)If a firm uses it surplus cash to acquire another firm then the shareholders of the acquiring firm immediately incur a tax liability related to the transaction.

Grasp the concept of closed-loop economic production models and their significance in sustainable development.

Comprehend the importance of social justice within the context of sustainable development and corporate responsibility.

Understand the concept of balance and sustainability in socio-economic development and how collaboration among stakeholders is crucial for achieving sustainable business initiatives.

Know the role of businesses, communities, and governments in scaling sustainable business practices and making them profitable.

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Definitions:

Net Sales

The total revenue from sales after subtracting returns, allowances for damaged or missing goods, and discounts.

Return On Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, indicating the profitability of a company from the common shareholders' perspective.

Net Income

The remaining earnings of a corporation after deducting all costs, taxes, and expenses from its gross revenue.

Common Stock

A type of equity security that represents ownership in a corporation, entitling shareholders to vote on corporate matters and possibly receive dividends.