IIA IIA-CIA-Part3 Quiz 30 Topic 8 Questions 146-150

Question: 1

A retail organization is considering acquiring a composite textile company. The retailer's due diligence team determined the value of the textile company to be $50 million. The financial experts forecasted net present value of future cash flows to be $60 million. Experts at the textile company determined their company's market value to be $55 million if purchased by another entity. However, the textile company could earn more than $70 million from the retail organization due to synergies. Therefore, the textile company is motivated to make the negotiation successful. Which of the following approaches is most likely to result in a successful negotiation?

ADevelop a bargaining zone that lies between $50 million and $70 million and create sets of outcomes between $50 million and $70 million.

BAdopt an added-value negotiating strategy, develop a bargaining zone between $50 million and $70 million, and create sets of outcomes between $50 million and $70 million.

CInvolve a mediator as a neutral party who can work with the textile company's management to determine a bargaining zone.

DDevelop a bargaining zone that lies between $55 million and $60 million and create sets of outcomes between $55 million and $60 million.

Show Answer

Question: 2

Which of the following are included in ISO 31000 risk principles and guidelines?

AStandards, framework, and process.

BStandards, assessments, and process.

CPrinciples, framework, and process.

DPrinciples, practices, and process.

Show Answer

Question: 3

A capital investment project will have a higher net present value, everything else being equal, if it has:

AA higher initial investment level.

BA higher discount rate.

CCash inflows that are larger in the later years of the life of the project.

DCash inflows that are larger in the earlier years of the life of the project.

Show Answer

Question: 4

Which of the following is the best reason for considering the acquisition of a nondomestic organization?

ARelatively fast market entry.

BImproved cash flow of the acquiring organization.

CIncreased diversity of corporate culture.

DOpportunity to influence local government policy.

Show Answer

Question: 5

If a bank's activities are categorized under such departments as community banking, institutional banking, and agricultural banking, what kind of departmentalization is being utilized?

AProduct departmentalization.

BProcess departmentalization.

CFunctional departmentalization.

DCustomer departmentalization.

Show Answer

IIA IIA-CIA-Part3 Quiz:30 Topic:8 Questions:146-150