Which of the following is NOT a valid reason for a firm to establish subsidiaries?
a. to better control risk exposure of either parent-to- subsidiary or subsidiary-to-parent.
b. to enhance the company's ability to evaluate individual performance and to create different compensation systems for a diverse set of its businesses.
c. to obfuscate financial reporting.
d. to conform with regulatory requirements specific to a particular business environment.
C
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Canada Sailboats Company manufactures 10 luxury yachts per month
A compact media center is included in each yacht. Canada Sailboats manufactures the media center in-house but is considering the possibility of outsourcing this function. At present, the variable cost per unit is $270, and the fixed costs are $40,000 per month. Justin Blake, the CEO, wishes to increase operating income by $3,000. He has an offer from a foreign producer to provide the media centers at a contract cost of $325 per unit. The required saving in fixed cost in order to achieve his objective would be ________. A) $3,000 B) $550 C) $3,550 D) $2,700
Which of the following statements regarding required minimum distributions is NOT correct?
A) Required minimum distributions must occur no later than age 59½. B) The first minimum withdrawal can be delayed until April 1 of the year following the owner turning 70½. C) Annual minimum withdrawals are based upon the life expectancy of the owner. D) There is a 50% penalty on taxes owed if minimum distributions are not taken.