Chapter 1 Test Bank BUSINESS COMBINATIONS Multiple Choice Questions LO1 1. Which of the following is a reason why a company would expand through a combination, rather than by building new facilities? a. A combination might provide cost advantages. b. A combination might provide fewer operating delays. c. A combination might provide easier access to intangible assets. d. All of the above are possible reasons that a company might choose a combination. LO2 2. A business combination in which a new corporation is created and two or more existing corporations are combined into the newly created corporation is called a a. merger. b. purchase transaction. c. pooling-of-interests. d. consolidation. 3. A business combination occurs when a company acquires an equity interest in another entity and has a. at least 20% ownership in the entity. b. more than 50% ownership in the entity. c. 100% ownership in the entity. d. control over the entity, irrespective of the percentage