Which of the Following Is Not a Reason for a Company

question 28

Multiple Choice

Which of the following is not a reason for a company to expand through a combination,rather than by building new facilities?

• A)A combination might provide cost advantages.
• B)A combination might provide fewer operating delays.
• C)A combination might provide easier access to intangible assets.
• D)A combination might provide an opportunity to invest in a company without having to take responsibility for its financial results.

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Definitions:

Value Basis

A method for assessing the value of assets, typically the original cost of the asset adjusted for factors such as depreciation.

Lumber Mill

A facility where logs are cut into timber, undergoing processes from debarking to sawing and sometimes further processing.

Board Feet

A volume measurement used in the lumber industry, equivalent to a piece of wood that is one foot long, one foot wide, and one inch thick.

Responsibility Accounting System

An accounting system that measures the results of each responsibility center and relates them to managers responsible for those centers.