Certain Post Integration Issues Are Best Addressed Prior to the Closing

question 93

Multiple Choice

Certain post integration issues are best addressed prior to the closing. These include all of the following except for

• A) Who will pay for employee severance expenses
• B) How will employee payroll be managed during ownership transition
• C) What will be done with checks from customers that the seller continues to receive after closing
• D) How will the seller be reimbursed for monies owed to suppliers for products sold prior to closing
• E) Who will pay for health care and disability claims that often arise just before a business is sold?

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Definitions:

Conventional Cash Flows

A series of inward and outward cash flows over time where there is typically one initial outflow followed by several inflowing cash amounts.

Profitability Index

The Profitability Index is a financial metric that compares the present value of future cash flows generated by a project to the initial investment, used to assess the attractiveness of an investment.

Average Accounting Return

A method of measuring an investment's profitability by comparing its average net income to its average book value.

Return on Assets

A profitability ratio that measures how efficiently a company is using its assets to generate profit, calculated by dividing net income by total assets.