Which of the Following Is an Example of a Merger

question 57

Multiple Choice

Which of the following is an example of a merger undertaken in order to achieve efficiency gains?

• A)A car manufacturer acquires a car parts supplier.
• B)A breakfast cereal producer acquires another breakfast cereal producer and the combined firm is able to negotiate a reduced cost for the grain used in its cereal.
• C)A telecommunications firm acquires another telecommunications firm and the combined firm serves a large percentage of the market.
• D)An accounting firm acquires another accounting firm and the combined firm is able to eliminate duplication among administrative positions.
• E)A video game development firm acquires another video game development firm that specializes in designing games for a new gaming system.

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Definitions:

Cost Concept

A concept of accounting that determines the amount initially entered into the accounting records for purchases.

Cost-Plus Approach

A pricing strategy where the selling price is determined by adding a specific markup to a product's cost price.

Product Pricing

The process of determining the cost at which a product will be sold, taking into account factors like production costs, market demand, and competition.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.