A Merger Between an Automobile Manufacturer and a Maker of Automobile

question 250

Multiple Choice

A merger between an automobile manufacturer and a maker of automobile tires is an example of a

• A)conglomerate merger.
• B)horizontal merger.
• C)vertical merger.
• D)tying contract.

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Definitions:

Hurdle Rate

The minimum rate of return on a project or investment required by a manager or investor.

Payback Method

An investment appraisal technique that calculates the amount of time required for an investment to generate cash flows sufficient to recover its initial cost.

Cash Inflows

Money or equivalent value received by a business, often from operations, investments, or financing activities.

Discounting

The process of determining the present value of a future amount of money or stream of income.