Which of these may be a source of synergy? I.Unused debt capacity
II.Economies of scale
III.Increase in overall revenue
IV.Unused net operating losses
A)I and IV only
B)II and III only
C)II,III,and IV only
D)I,II,and III only
E)I,II,III,and IV

Question

Quizplus · Accepted Answer

Synergy can arise from various sources, including unused debt capacity (I) which can be leveraged to finance growth or acquisitions, economies of scale (II) that reduce per-unit costs as production volume increases, an increase in overall revenue (III) through expanded market share or product lines, and unused net operating losses (IV) which can be used to offset future taxable income, thereby reducing tax liabilities.

Which of These May Be a Source of Synergy? I