Since the Primary Rationale for Any Operating Merger Is Synergy

question 23

True/False

Since the primary rationale for any operating merger is synergy, in planning such mergers, the development of accurate pro forma cash flows is the single most important action.

---

Definitions:

Diminishing Returns

A principle stating that the addition of more of one factor of production, holding all else constant, will at some point yield lower incremental per-unit returns.

Marginal Product

The additional output resulting from the use of one more unit of a variable input, holding other inputs constant.

Cookie Production

The process of baking cookies, which involves mixing ingredients according to a recipe, shaping, and then heating them in an oven until done.

Marginal Productivity

The additional output produced by employing one more unit of a specific factor of production, holding other factors constant.