An Appropriate Value of a Target to the Acquiring Firm

question 2

Multiple Choice

An appropriate value of a target to the acquiring firm is:

• A)the future value of the cash flow that the target can expect over the life of the target's assets.
• B)the present value of the cash flow that the target can expect over the life of the target's assets.
• C)the present value of the estimated cash flow of the firm over a five year period plus the present value of the salvage value of the target's assets.
• D)the future value of the expected cash flow from current and expected contracts of the target over the life of the target's assets.

---

Definitions:

ERG Theory

A motivational theory developed by Clayton Alderfer that categorizes human needs into three groups: Existence, Relatedness, and Growth, suggesting that individuals are motivated to satisfy these needs.

Clayton Alderfer

An American psychologist known for his expansion of Maslow's hierarchy of needs with the development of the ERG (Existence, Relatedness, Growth) theory.

Hierarchy of Needs

A psychological theory proposed by Abraham Maslow that depicts human motivations as a five-tier model of hierarchical needs, ranging from basic (physiological) to higher-order (self-actualization) needs.

Self-Actualization Need

The highest level in Maslow's hierarchy of needs, referring to the realization and fulfillment of one's talents and potentialities.