Which of the Following Statements Is TRUE Concerning Domestic Expansion

question 1

Multiple Choice

Which of the following statements is TRUE concerning domestic expansion of a business?

• A) Cash funding requirements will be lower to establish a new corporation than a corporate division if the expansion activity incurs substantial start-up losses.
• B)Cash funding requirements will be higher to establish a new corporation than a corporate division if the expansion activity incurs substantial start-up losses.
• C) Obligations of a new division will have no impact on the founding corporation.
• D) The main advantage of incorporating an expansion activity is the use of start-up losses from the new corporation against income from the founding corporation.

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