Which of the Following Expansion Strategies Results in the Formation

question 8

Multiple Choice

Which of the following expansion strategies results in the formation of an entity that is an entirely new corporation?

• A) A cash merger
• B) A takeover
• C) A consolidation
• D) An asset purchase
• E) A noncash merger

---

Definitions:

Undervalued Inventory

A situation where the reported value of inventory is less than its actual market value, possibly affecting financial statements negatively.

Straight Line Amortization

A method of evenly spreading the cost of an intangible asset over its useful life.

Trademark

A sign, term, or expression that is legally recognized or traditionally used to denote a corporation or merchandise.

Equity Method

Accounting for investments where the investing entity has significant influence, adjusting the investment value for earnings, losses, and dividends received.