Computer Peripherals Provider Ascent Plans to Enter a New Market

question 36

Multiple Choice

Computer peripherals provider Ascent plans to enter a new market in another country.Which of the following represents a threat for Ascent?

• A)Ascent's profit margin in the previous year was its lowest on record and it will require long-term planning to improve margins.
• B)Ascent lacks the resources to enter the market on its own and has to find a partner in the new market.
• C)Ascent will have to plan its entry carefully as the laws in the country do not favor foreign businesses.
• D)Ascent needs to improve its service capabilities in the new country as this is an important source of revenue.

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Definitions:

AMT Calculation

The process of determining the amount of Alternative Minimum Tax an individual or corporation owes by adjusting certain tax preference items and deductions.

AMTI

Stands for Alternative Minimum Taxable Income, which is calculated by adding certain tax preference items back into adjusted gross income.

Incentive Stock Options

A type of stock option that provides tax advantages for the employee, including delayed tax implications until the stock is sold.

AMT Adjustment

Adjustments and preferences added back to or subtracted from taxable income to calculate the Alternative Minimum Tax.