P&G's Purchase of AG-Hutchison Ltd in 2004 Is an Example

question 5

Multiple Choice

P&G's purchase of AG-Hutchison Ltd in 2004 is an example of a

• A) conglomerate merger.
• B) vertical merger.
• C) market extension merger.
• D) conglomerate acquisition.

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Definitions:

Straight-Line Method

A depreciation method that allocates an equal amount of the cost of an asset to each year of its useful life.

Scrap Value

The projected amount an asset is expected to generate when it is sold after reaching the end of its lifespan.

Double-Declining-Balance

A method of accelerated depreciation which doubles the rate of straight line depreciation, expensing more of the asset's value in the early years of its life.

Scrap Value

The anticipated market value of an asset at the end of its operational lifetime.