Which One of These Is the Best Indicator That Acquiring

question 12

Multiple Choice

Which one of these is the best indicator that acquiring a firm is a good idea?

• A)The firm has a positive NPV at an appropriate discount rate.
• B)The firm has a negative NPV at all positive discount rates.
• C)The firm has a positive NPV at the riskless rate of return.
• D)The firm has increasing cash inflows.
• E)The firm is growing on an annual basis.

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Definitions:

Sulfide Minerals

Minerals composed of sulfur combined with a metal or semimetal, often associated with the formation of ores.

Impermeable Rocks

Rocks that do not allow water to pass through them due to lack of porosity or permeability.

Deep Canyon

A steep-sided valley typically eroded by a river over geologic time scales, characterized by its significant depth.

Reservoir

A natural or artificial place where water is collected and stored for use, especially water for supplying a community, irrigating land, furnishing power, or supporting aquatic life.