A Primary Reason for a Firm to Pursue an Acquisition

question 92

Multiple Choice

A primary reason for a firm to pursue an acquisition is to:

• A) avoid increased government regulation.
• B) achieve greater market power.
• C) exit a hyper-competitive market.
• D) achieve greater financial returns in the short run.

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Definitions:

Days' Sales

A financial metric that estimates a company's average collection period for receivables, often expressed in days.

Solvency

The ability of a company to meet its long-term debts and financial obligations.

Average Inventory

The mean value of inventory a business has over a certain period of time, calculated to assess inventory turnover and management efficiency.

Beginning Inventory

The value of a company's inventory at the start of an accounting period before any purchases or sales have been made.