Abada Inc. has a $925,000 basis in 100% of the stock of AbWest Inc., which derives all its income from a manufacturing activity. If Abada determines that the AbWest stock is worthless, it can recognize a $925,000 ordinary loss.
Answer the following statement true (T) or false (F)
True
AbWest Inc. is an affiliated corporation of Abada Inc., and as such, the stock being deemed worthless is an ordinary loss.
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Explain, using three qualities, why some innovations are adopted and others are not.
What will be an ideal response?
Which of the following statements does not describe the benefits of utilizing distribution centers over direct store delivery?
A. The effects of forecast error for the individual stores are minimized and less backup inventory is needed to prevent stockouts. B. The use of distribution centers increases inventory investment. C. It is easier to avoid running out of stock or having too much stock in any particular store because merchandise is ordered from the distribution center as needed. D. More accurate sales forecasts are possible when retailers combine forecasts for many stores serviced by one distribution center rather than doing a forecast for each store. E. Distribution centers enable the retailer to carry less merchandise in the individual stores.
Liquidity ratios can be used:
a. to measure the degree of protection of long-term suppliers of funds. b. to measure borrowing capacity. c. to measure the earning ability of a firm. d. to measure the firm's ability to meet its current obligations. e. to measure the worth of the firm.
Answer the following statements true (T) or false (F)
1. The budgeted multi-step income statements of both manufacturing and merchandising companies include the calculation of gross profit. 2. Use of advanced technology makes it more cost effective for managers to conduct sensitivity analysis. 3. Sensitivity analysis is a what-if technique. 4. Budgeting software is often designed as a component of the company's Enterprise Resource Planning (ERP) system.