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One Advantage of Acquiring a Corporation Via an Asset Purchase

question 3

True/False

One advantage of acquiring a corporation via an asset purchase instead of a stock purchase is that an asset purchase avoids the transfer of the acquired corporation's liabilities.

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Definitions:

Estimated Salvage Value

The projected value of an asset at the end of its useful life, used in calculating depreciation.

Straight-Line Depreciation

A method of allocating an asset's cost evenly across its useful life.

Useful Life

The estimated time period that an asset is expected to be usable for the purpose it was acquired, influencing depreciation calculations and capital budgeting.

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading its cost over the expected useful life of the asset.

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