What Method Must Be Used If FASB Statement No

question 27

Multiple Choice

What method must be used if FASB Statement No.94 prohibits full consolidation of a 70% owned subsidiary?

• A)The cost method
• B)The Liquidation value
• C)Market value
• D)Equity method

---

Definitions:

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.

Incremental Cost

Incremental cost is the additional cost associated with producing one more unit of a product or service.

Operating Cash Flow

Operating cash flow is a measure of the cash generated by a company's regular business operations, indicating the company's ability to generate sufficient positive cash flow to maintain and grow its operations.

Net Present Value

The measurement of the profitability of an investment, calculated by subtracting the present values of cash outflows from the present values of cash inflows over a period of time.