1. What is the difference between a firm’s financial accounting asset basis and its tax asset basis? How would you quantify such a difference? Be sure to mention specific accounts in the financial...

1. What is the difference between a firm’s financial accounting asset basis and its tax asset basis? How would you quantify such a difference? Be sure to mention specific accounts in the financial statements and techniques.

2. What does a carryover basis transaction imply about the basis of the assets of the target firm? Does a carryover basis transaction generate incremental cash flow for the acquirer? What type of acquisition generates incremental cash flow for an acquirer? What is the source of this incremental cash flow?