In a Restructuring It Is Possible That Managers May Use

question 37

Multiple Choice

In a restructuring it is possible that managers may use the opportunity to write down assets that do not even relate directly to the restructuring action.Why might a manager decide to write down an asset that is not included in the restructuring action?

• A) The manager is practicing conservatism.
• B) The write down relieves future periods of depreciation expense, which increases cash flows.
• C) Normally the stock market reacts positively to restructuring and the greater the amount the better.
• D) The write down relieves future periods of depreciation expense, which increases earnings.

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Definitions:

Isolating Factors

Conditions or barriers that inhibit the interaction, interbreeding, or cultural exchange between populations, leading to differentiation or speciation in biology, or cultural divergence.

Adaptive Function

Refers to the way behaviors or traits contribute to an organism's survival and reproductive success in its environment.

Genetic Level

Pertaining to or influenced by the genes, which are the units of heredity within the living organisms' DNA.

Biological Diversity

The variety and variability of life forms within a given ecosystem, region, or on the entire Earth, including the diversity of species, genetics, and ecosystems.