Which of the Following Statements Regarding Mergers and Taxes Is

question 58

Multiple Choice

Which of the following statements regarding mergers and taxes is FALSE?

• A)Carryback and carryforward provisions essentially deliver the benefits of conglomeration to a small firm with volatile earnings.
• B)It might appear that a conglomerate has a tax advantage over a single-product firm simply because losses in one division can offset profits in another division.
• C)Companies with current-year losses can also use them to offset earnings (carryback)for the twenty prior years.
• D)The IRS will disallow a tax break if it can show that the principal reason for a takeover is tax avoidance,so it is unlikely that the tax advantage could,by itself,be a valid reason to acquire another firm.

Distinguish sentences that assert more than one proposition.

Understand the impact of verb tense, voice, and negation on the meaning of propositions.

Interpret sentences that imply propositions without explicitly stating them.

Analyze the structure and components of compound sentences.

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Definitions:

Events Sequence

The order in which events occur, often important in planning, project management, and process execution.

Receivable

A receivable is an amount of money owed to a firm by its customers following the sale of goods or services on credit.

Accounts Receivable

These are funds owed to a company by customers for goods or services delivered or used but not yet paid for; considered a current asset on the balance sheet.

Industrial Firms

Companies engaged in the production of goods within an industrial sector, including manufacturing, construction, and mining activities.