The Following Is a Summary of Information Presented on the Financial

question 98

Multiple Choice

The following is a summary of information presented on the financial statements of a company on December 31, 2019. $$\begin{array} { | l | r | r | } \hline \text { Account } &{ \mathbf { 2 0 1 9 } } & { \mathbf { 2 0 1 8 } } \\\hline \text { Current Assets } & \$ 87,000 & \$ 73,000 \\\hline \text { Accounts Receivable } & 85,000 & 81,000 \\\hline \text { Merchandise Inventory } & 63,000 & 56,000 \\\hline \text { Current Liabilities } & 53,000 & 51,000 \\\hline \text { Long-term Liabilities } & 44,000 & 52,000 \\\hline \text { Common Stock } & 70,000 & 57,000 \\\hline \text { Retained Earnings } & 68,000 & 50,000 \\\hline\end{array}$$ With respect to long-term liabilities, a horizontal analysis reveals ________.

• A) long-term liabilities decreased by $13,000
• B) long-term liabilities decreased by 22.81%
• C) long-term liabilities decreased by 15.38%
• D) long-term liabilities decreased by $2000

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Definitions:

Synergistic Benefits

The additional value created by combining two or more elements (companies, technologies, assets) that when integrated, produce a total effect greater than the sum of their individual effects.

Net Present Value

Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of an investment or project.

After-Tax Net Present Value

A financial calculation that evaluates the profitability of an investment or project after accounting for taxes, presenting the difference between the present value of cash inflows and outflows.

Depreciation

The distribution of a physical asset's cost across its lifespan, mirroring its depreciation over time.