What is often the main motivation behind the practice of taking a "big bath" in a loss year?
A)To minimize income taxes
B)To smooth income
C)To maximize asset book values
D)To increase future years' earnings

Question

Quizplus · Accepted Answer

The "big bath" strategy involves taking large write-offs in a bad year to make future years' earnings look better, as the losses are already accounted for.

What Is Often the Main Motivation Behind the Practice of Taking