When Making a Cash Acquisition of a Going Concern, the Acquiring

question 91

Multiple Choice

When making a cash acquisition of a going concern, the acquiring corporation should ________.

• A) adjust after-tax cash flows generated from new assets
• B) recognize different accounting techniques
• C) adjust the discount rate for risk differences
• D) consider the problems of assimilating the acquired management

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Definitions:

Forced Transaction

A sale or trade that occurs under pressure, often lacking the free will or consent of one of the parties involved.

Dissolution

The official closure of an entity, such as a corporation or partnership, with legal processes to disband and distribute assets.

Court Order

A formal instruction or command issued by a court, requiring a person or entity to do or refrain from doing something.

Stakeholders

Groups, other than the company’s shareholders, that are affected by corporate decisions. Stakeholders include employees, customers, creditors, suppliers, and the community in which the corporation operates.