Which Statement Is Correct

question 88

Multiple Choice

Which statement is correct?

• A) Monopolist firms tend to be more internally efficient than competitive firms because they have a single goal of profit maximization.
• B) Monopolist firms are sheltered from competitive forces and such an environment makes them subject to X-inefficiency.
• C) Monopolist firms are in industries with low barriers to entry that tend to lower the cost of producing products.
• D) Competitive firms tend to be more efficient than monopolist firms because they maximize per-unit profits,not total profits.

Comprehend the process and importance of capital budgeting in long-term investment planning.

Understand the key components of capital budgeting and its significance in financial decision-making.

Identify the roles and reporting structure within corporate finance.

Comprehend the primary subject areas of corporate finance including capital budgeting, capital structure, and working capital management.

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Definitions:

Business Combination Revaluation

A reassessment of the fair value of assets and liabilities of companies involved in a merger or acquisition, affecting their combined balance sheet.

Shareholder's Equity

The ownership interest of shareholders in the assets of a company after deducting all its liabilities.

Fair Values

The financial return on disposing of an asset or the cost to transfer a responsibility in a formal transaction with market counterparts on the evaluation date.

Business Combination Valuation Entries

Accounting entries made to adjust and reflect the fair values of assets acquired and liabilities assumed in a business combination.