Firm V Was Worth $450 and Firm a Had a Market

question 21

Multiple Choice

Firm V was worth $450 and Firm A had a market value of $375.Firm V acquired Firm A for $425 because they thought the combination of the new Firm VA was worth $925.What is the NPV from the merger of Firm V and Firm A?

• A)$0
• B)$50
• C)$425
• D)$450
• E)None of the above.

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Definitions:

Negotiation

The process whereby two or more parties discuss and attempt to reach a mutual agreement on matters of common interest.

Forgery

The act of falsely making or altering a document with the intent to deceive or defraud.

Negotiable Instrument

A document guaranteeing the payment of a specific amount either on demand or at a set time, with the instrument being transferable between parties.

Unauthorized Signature

A signature that is made without the explicit permission of the person purportedly signing or the authority to sign on behalf of an entity.