The Two Primary Steps Involved in Finding an Appropriate Acquisition

question 19

Multiple Choice

The two primary steps involved in finding an appropriate acquisition candidate are (1) Make a "short list" of appropriate acquisition candidates and (2) ________.

• A) carefully screen each candidate to determine its suitability for acquisition
• B) interview the CEO of each candidate to determine his/her openness to an acquisition
• C) determine if acquiring each candidate is financially feasible
• D) meet with each candidate's top management team to discern if they are compatible with your top management team
• E) hire a consulting firm to determine the best acquisition candidate

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Definitions:

Direct Labour

The labour costs directly attributable to the production of goods or services, including wages for workers who physically manufacture a product.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor costs.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed expenses and then contribute to profit.

Variable Expenses

Costs that vary directly with the level of production or sales volume.