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A Firm Can Reduce Its Expected Legal Costs by Negotiating

Question 39

Multiple Choice

A firm can reduce its expected legal costs by negotiating an advance pricing agreement (APA) with the IRS.However,filing an APA can expose the firm to considerable risk by giving the government access to its sensitive cost-related information.This is an example of the _____ that arise due to regulation.:


A) information asymmetries
B) opportunity costs
C) positive externalities
D) legal costs

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