The synergy strategy is one of the most successful acquisition strategies because it primarily:
Question 1The synergy strategy is one of the most successful acquisition strategies because it primarily:
A. a. Improves the quality of its products
B. Seeks to acquire businesses outside of its home established markets
C. Bases acquisitions decisions on cost reduction or revenue advantages
D. Bases acquisitions decisions on revenue enhancement opportunities
Question 2The result of the affordable growth rate can be impacted by:
A. Dividends paid in cash
B. Changes in the amount of assets employed
C. The renewal of existing debt agreements
D. The equivalency of cash flows and net profits
Question 3During an acquisition due diligence, corporate culture can be a particular roadblock when:
A. Members of both companies have worked together on joint ventures in the past
B. The computer systems used are different
C. The buyer imposes a command-and-control system
D. Managers from both companies want to run the combined entity
Question 4Acquisition valuation methods include:
A. Comparison analysis
B. Liquidation value
C. Discounted cash flows value
D. All answers are
Question 5Acquisition Integration issues include:
A. Cross training of the sales staff
B. Deciding which employees to retain and which to terminate
C. Integration of information technology
D. All answers are
Question 6The legal forms of acquisition payment include:
A. Exchange of stock
B. Borrowing
C. Using cash
D. All answers are
Question 7Return on Assets is typically defined as:
A. The amount of money earned from all business units
B. Net income divided by total assets
C. Operating income minus income from cash reserves
D. None of the above
Question 8Return on Equity is:
A. A metric for comparing profits to annual interest rates
B. Payback on the total market capitalization of the company
C. Net income divided by shareholders’ equity
D. The total profit divided by the total debt
Question 9Working capital productivity measurement:
A. Determines sales levels are consistent from period to period
B. Measures whether a business has invested in a sufficient amount of working capital to support its sales
C. Calculates the proportion of receivables in working capital
D. Estimates if there is a high proportion of inventory in working capital
Question 10Indicators of a strong acquisition candidate include.
A. High employee turnover
B. A history of producing earnings and operations
C. A complex organizational structure exists
D. Company has attempted to sell itself in the past, and failed to do so
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