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timofeeve [1]
3 years ago
10

Which of the following best describes vertical integration? A. sell products to a supplier or a distributor B. develop the abili

ty to produce products that complement the original product C. develop the ability to produce the specified good more efficiently than before D. build long-term partnerships with a few suppliers E. produce goods or services previously purchased
Business
1 answer:
jasenka [17]3 years ago
7 0

Answer: B

Explanation:

A vertical integration is where a company owns another company in the same production line.

For example a company that bakes bread has a farm where wheat is cultivated, a marketing company and retail locations for the sale of the bread.

The advantages of Vertical integration include:

a. It reduces costs.

b. It increases efficiency.

c. It gives the firm greater control of the production process.

A major disadvantage of vertical integration is it requires huge capital outlay.

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Answer:

$21000

Explanation:

To determine Gray’s tax basis  for a 50% interest in the Fabco Partnership, The interest is increased by the partner’s  distributive share of all partnership items of income and decreased by the partner’s distributive share of all loss and  deduction items.

Gray’s beginning basis = $5,000  

Gray’s 50% distributive share of ordinary  income = 50% × $20000 = $10000

Gray’s 50% tax-exempt income= 50% × $8000 = $4,000 and  

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Therefore, the ending basis of  Gray’s Fabco partnership interest = $5000 + $10000 + $4000 + $2000 = $21000

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