A Software Firm Is Interested in Acquiring an App Development

question 2

Multiple Choice

A software firm is interested in acquiring an app development company that is small but highly profitable. The app developer also has a widely admired management structure and much lower attrition rates than are common in the industry. Which of these problems should the software firm anticipate?

• A) A rival software firm may imitate this approach by acquiring a similar app developer.
• B) The software firm may overpay for the app developer, poorly serving the software firm's shareholders.
• C) Because most acquisitions are profitable, there is little to worry about in this scenario.
• D) The software firm may underpay for the app developer, cheating the app developer's shareholders of profit.

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Definitions:

Value Analysis

A methodical approach to assessing a product or service to reduce costs without impairing quality or performance, aiming to improve value for the manufacturer and customer.

Customer Benefit Plan

A strategy designed by businesses to outline and communicate the advantages or value a customer will receive from their product or service.

Smart

Typically related to devices or technology, denoting intelligence or connectivity features that allow for more efficient and interactive use.

Targeted Rate

A specific goal or benchmark rate set for performance, financial returns, or other measurable outcomes.