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Prior to SFAS 94, many companies avoided consolidating finance subsidiaries in their financial statements because the subsidiary was in an unrelated industry. Such companies could

Prior to SFAS 94, many companies avoided consolidating finance subsidiaries in their financial statements because the subsidiary was in an unrelated industry. Such companies could also have been motivated to exclude such subsidiaries from their financial statements because including them would:

a. Cause consolidated income to decline

b. Raise the consolidated debt to equity ratio

c. Reduce the income to assets ratio

d. Reduce consolidated assets

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