Many Companies Do Not Want to Use Market Prices, or Find

question 116

Multiple Choice

Many companies do not want to use market prices, or find it too costly, and they use ________ prices, even though sub optimal decisions may occur.

• A) average-cost
• B) full-cost
• C) long-run cost
• D) short-run average cost
• E) variable cost

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Definitions:

NCI

NCI, or Non-Controlling Interest, refers to the share of ownership in a subsidiary that belongs to shareholders other than the parent company.

Entity Method

An accounting technique used in consolidations, treating the parent and subsidiary as separate entities for the calculation of minority interest and consolidated net income.

Non-Controlling Interest

The portion of equity in a subsidiary not held by the parent company, reflecting the minority shareholders' share of the profits and losses.

Net Assets

The total assets of an entity minus its total liabilities, representing the owners' equity or net worth of the entity.