Firm a Has a Value of $100 Million, and B

question 5

Multiple Choice

Firm A has a value of $100 million, and B has a value of $70 million. Merging the two would allow a cost savings with a present value of $20 million. Firm A purchases B for $75 million. What is the cost of this merger?

• A) $30 million
• B) $20 million
• C) $5 million
• D) $10 million

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Definitions:

Sectors

Distinct subsets of the economy, categorized by the type of activity involved, such as the agriculture, manufacturing, or services sectors.

Japanese Yen

The official currency of Japan, symbolized as ¥ and known for its role in international trade and investment.

Dollar

The official currency of several countries, including the United States, often considered a benchmark and reserve currency worldwide.

Net Exports

The value of a country's total exports minus its total imports, representing the contribution of the trade balance to the overall GDP.