Consolidated Net Income Would Be

question 1

Multiple Choice

Consolidated Net Income would be:

• A) higher if the parent chooses to use Equity Method rather than the Cost Method.
• B) higher if the parent chooses to use the Equity Method rather than the Cost Method, provided that the subsidiary showed a profit.
• C) lower if the parent chooses to use Equity Method rather than the Cost Method.
• D) the same under both the Cost and Equity Methods.

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Definitions:

Market Value

The current quoted price at which an asset or service can be bought or sold in a marketplace.