Which of the Following Is Not a Reason for Acquiring

question 33

Multiple Choice

Which of the following is not a reason for acquiring a controlling interest in another company?

• A)Possible economies of scale.
• B)Reducing business risk.
• C)Increasing competition.
• D)Safeguarding supply resources.

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Definitions:

Noncash Assets

Assets that are not in the form of cash or cannot be easily converted into cash, such as real estate, equipment, or inventory.

Noncash Assets

Assets that cannot be easily converted into cash, including property, plant, equipment, patents, and trademarks.

Gain or Loss

The financial result of transactions that leads to an increase (gain) or decrease (loss) in the capital of an entity, not related to its primary operations.

Capital Balances

The amount of funds that each partner or shareholder has contributed to a company, not including any profits or losses retained in the company.