Which of the following is not a nd appropriate rason for establishing a subsidia

Question

Which of the following is not a nd appropriate rason for establishing a subsidiary?

a. the parent wishes to protect existing operations by shifting new activities with grater risk to a nwely crated subsidiary

b. the parent wishes to avoid subjecting all of its operations to regulatory control by establishing a subsidiary that focuses its operations in regulated industries.

c. the parent wishes to reduce its taxes by establishing a subsidiray that focuses its operations in aras where special tax benefits are available

d. the parent whishes to be able to increase its reported sales by transferring products to the subsidiary at the end of the fiscal year

Explanation / Answer

OUt of the following option d is not an appropriate reason to establish a subsidiary i.e. the parent wishes to be able to increase its reported sales by transferring products to the subsidiary at the end of the fiscal year

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