Which of the Following Is a Poor Justification for a Merger

question 14

Multiple Choice

Which of the following is a poor justification for a merger?

• A) Tax considerations
• B) Lowering cost of capital
• C) Reducing costs
• D) Increasing the size of the firm

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Definitions:

MACRS

The Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes that allows faster write-offs on property.

Mid-Month Convention

A rule for depreciation of business assets that assumes assets are acquired and disposed of at the midpoint of the month.

Personal Property

Assets belonging to an individual that are movable, excluding real estate or land.

Fines Paid

Monetary charges imposed as a penalty for breaking laws or regulations, generally not deductible for tax purposes.