When Evaluating an Acquisition You Should

question 176

Multiple Choice

When evaluating an acquisition you should:

• A) Concentrate on book values and ignore market values.
• B) Focus on the total cash flows of the merged firm.
• C) Apply the rate of return that is relevant to the incremental cash flows.
• D) Ignore any one-time acquisition fees or transaction costs.
• E) Ignore any potential changes in management.

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Definitions:

Fixed-interval

Refers to a schedule of reinforcement where a response is rewarded only after a specified amount of time has elapsed.

Fixed-ratio

A method of reinforcement where only after a certain number of responses are completed is a reward provided.

Operant Conditioning

A strategy in behavioral training where the intensity of actions is adjusted through the provision of rewards or the imposition of consequences.

Conditioned Reinforcement

A type of reinforcement where a stimulus gains its reinforcing power through its association with a primary reinforcer.