Exam 14: Accessing Resources for Growth From External Sources

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A common procedure for determining a merger's value is to estimate the present value of discounted cash flows and the expected after-tax earnings attributable to the merger.

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The concept that "the whole is greater than the sum of its parts" is known as:

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In evaluating an LBO's asking price,an entrepreneur can use subjective measures such as evaluating the abilities of key personnel remaining with the firm.

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Identify and describe the three parts of a leveraged buyout evaluation procedure an entrepreneur can use to determine whether a specific company is a good candidate for an LBO.

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Which of the following is not an advantage of franchising to the franchisee

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An unproven franchise:

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A joint venture is a separate entity that involves a partnership between two or more active participants.

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Franchising opportunities have often evolved from changes in the environment as well as important social trends.Which is not one of the factors responsible discussed in the textbook

(Multiple Choice)
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Synergy is defined as "the intangible benefits of mergers and acquisitions."

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In most leveraged buyouts,the equity usually exceeds the debt capital equity by 5:1.

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Franchising involves payment of royalties in exchange for exclusive distribution rights.

(True/False)
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Franchising allows the franchisor to benefit from economies of scale in purchasing.

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Which of the following would be an advantage of an acquisition

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Franchisees usually contribute ________ of sales to an advertising pool.

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Which of the following are not factors in the success of joint ventures according to the text

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Most ventures that are up for sale have good to very successful profit records.

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Quantitative methods of analyzing the fairness of an LBO's asking price include price-earnings ratios,present value of future earnings,and book value.

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Protection against an unwarranted takeover,technical obsolescence,or protection against market encroachment,are some of the reasons why a company would opt for

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When an entrepreneur bootstraps the purchase of a company,none of the price of the acquisition is cash.

(True/False)
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With regard to negotiation,define the following: distribution task,integration task and reservation price.

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