土豆妮

When comparing companies that hold equity investments in other corporations, which of the following statements is most accurate? All else being equal, net profit margin measures for a firm using proportionate consolidation will appear:

A) more favorable than those for a comparable firm using consolidation, and less favorable than those for a comparable firm using the equity method.

B) less favorable than those for a comparable firm using consolidation, and less favorable than those for a comparable firm using the equity method.

C) less favorable than those for a comparable firm using consolidation, and more favorable than those for a comparable firm using the equity method.

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All else being equal, net profit margin measures for a firm using proportionate consolidation will appear more favorable than those for a comparable firm using consolidation, and less favorable than those for a comparable firm using the equity method. This is because the choice of accounting method will affect the level of sales, while the level of net income remains the same.