Reference no: EM132224173

1. An acquisition is when:

A-one company agrees on a strategic partnership with another company and both companies continue to exist.

B-a franchisee pays franchise costs plus royalties to a franchisor.

C-one company purchases intellectual property from another.

D-one company purchases and absorbs another company.

2. Imagine that you own a local fitness gym in your hometown called “U-Fit.” You have done well over the last few years and have enough capital to acquire your hometown competition, the “Pump It” gym. Why would it be a good idea for you to undertake a horizontal merger or acquisition?

A-To use your expertise to improve the company and then sell it for a higher price.

B-To take advantage of synergies and potential market share gains.

C-To increase synergies by merging firms that would be more efficient operating as one.

D-To tap into a new market formerly unavailable to one of the companies.