Due Diligence Is the Process of Validating Assumptions Underlying the Initial

question 78

True/False

Due diligence is the process of validating assumptions underlying the initial valuation of the target firm as well as the uncovering of factors that had not previously been considered that could enhance or detract from the value of the target firm.

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Definitions:

Disbursement Float

The time lag between a payment being made by a company and the actual withdrawal of funds from the company's account.

Deposited

Placing money into a financial account or institution for safekeeping or investment purposes.

Collection Float

The time period between when a check is deposited and when the funds are available in the payee’s account, reflecting the bank’s processing time.