A tax loss carryforward of $1,000,000 for company ZZZ is not usually worth $1,000,000 in present value to a firm that might acquire company ZZZ.

Question

Quizplus · Accepted Answer

The present value of a tax loss carryforward depends on various factors such as the tax laws and the financial position of the acquiring firm. Therefore, it may not be worth the full $1,000,000 to the acquiring firm.

A Tax Loss Carryforward of $1,000,000 for Company ZZZ Is