Which of the Following Is an Advantage of an Acquisition

question 71

Multiple Choice

Which of the following is an advantage of an acquisition as a means of entry into foreign markets?

• A) It is much easier to change the culture of an existing organization than build a new organization.
• B) It is easier to convert the operating routines of acquired units than establish routines in new subsidiaries.
• C) It yields greater long-run returns than greenfield ventures.
• D) It gives firms access to valuable intangible assets along with a set of tangible assets.
• E) Acquired firms are often undervalued and hence assets can be purchased at minimal prices.

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Definitions:

Balance Sheet

A financial statement that displays a company’s assets, liabilities, and shareholders' equity at a specific point in time.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period, illustrating its financial performance.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate revenue.

Balance Sheet

A snapshot report of a company's assets, liabilities, and shareholder equity at a specific time.