Which of the Following Is a Benefit That Firms Should

question 55

Multiple Choice

Which of the following is a benefit that firms should expect to gain from the use of horizontal integration?

• A) Expanded control over stages of the supply chain
• B) Better realization of economies of scale
• C) Shared risk with another firm
• D) Reduced risk of holdup
• E) Reduced investments in noncore activities

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Definitions:

Changed Estimate

An adjustment made to the book value or depreciation of an asset, based on updated information about its expected useful life or residual value.

Nonrecurring Gains

Profits that are not expected to happen regularly or repeatedly, coming from events like asset sales, lawsuit winnings, or one-time events affecting financial performance.

Income From Continuing Operations

Earnings generated from the normal, recurring activities of a business, excluding any one-time transactions or discontinued operations.

Nonrecurring Losses

Losses that are not expected to happen again in the foreseeable future, differentiated from normal business operations.