Which of the following represent potential tax gains from an acquisition?
I. A reduction in the level of debt
II. An increase in surplus funds
III. The use of net operating losses
IV. An increased use of leverage
A) I and IV only
B) II and III only
C) III and IV only
D) I and III only
E) II, III, and IV only

Question

Quizplus · Accepted Answer

The use of net operating losses (III) can provide tax benefits by offsetting taxable income, and an increased use of leverage (IV) can lead to tax savings through interest deductions.

Which of the Following Represent Potential Tax Gains from an Acquisition