What is the bankruptcy-risk categorization of firm

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Reference no: EM132008851

Carl's Tires is planning to merge with Joe's Body Shop to offer a combined auto repair service shop. Carl's Tires has total costs of $1,500,000 and sales of $2,000,000, while Joe's Body Shop features costs of $2,200,000 and sales of $4,000,000. The combined firms will be able to achieve economies of scope sufficient to reduce costs by $400,000 while maintaining sales at current levels. Calculate the difference between the percentage values of the average costs of the merged firms and the combined average costs of two nearby competitors. These competitors continue to sell tires and do auto repair separately, having total costs of $2,000,000 and sales of $2,500,000, $2,400,000, and $3,200,000, respectively.

A. 23.56 percent

B. 28.45 percent

C. 34 percent

D. 22.19 percent

What's the bankruptcy-risk categorization of a firm with a 1.8 Z-score?

A. Low

B. High

C. Very low

D. Indeterminate

_______ was/were one of the causes of the financial crisis that peaked in the fall of 2008.

A. Double taxation

B. Defaults by subprime mortgage borrowers

C. The American Recovery and Reinvestment Act

D. The Sarbanes-Oxley Act

The practice of monitoring company managers and aligning their incentives with shareholder goals is known as

A. corporate governance.

B. financial management.

C. agency theory.

D. fiduciary relationship.

Reference no: EM132008851

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