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NEW QUESTION: 1
A common mistake in valuing the entity to be acquired in a business combination is:
A. Including all related transaction costs associated with an acquisition.
B. Using market values in the valuation.
C. Including incremental cash flows in the valuation.
D. Using the acquirer's discount rate when valuing the incremental cash flows.
Answer: D
Explanation:
If the net incremental cash flows to the acquirer's shareholders are to be valued, the discount rate used should be the cost of equity capital. Moreover, this rate should reflect the risk associated with the use of funds rather than their source. The rate therefore should not be the cost of capital of the acquirer but rather the cost of equity of the combined entity after the combination. This calculation requires a new estimate of beta to be used in the Capital Asset Pricing Model.

NEW QUESTION: 2
What are three characteristics of RIPv1? (Choose three.)
A. Includes prefix length in updates.
B. Broadcasts messages between neighbors.
C. Performsclassful routing.
D. Supports simple password authentication.
E. Implements poison reverse.
Answer: B,C,E

NEW QUESTION: 3
Of the following items, the one item that would not be considered in evaluating the adequacy of the
budgeted annual operating income for a company is:
A. Long-range profit objectives.
B. Internal rate of return.
C. Return on assets.
D. Industry average for earnings on sales.
Answer: B
Explanation:
Choice "d" is correct. In evaluating the adequacy of the budgeted annual operating income, you would not
use the internal rate of return calculation. The internal rate of return is used for capital budgeting.
Choices "a", "b", and "c" are incorrect. Return on assets, long range profit objectives, industry average for
earnings on sales, and earnings per share [not mentioned as an option] are all measures for evaluating
the adequacy of the budgeted annual operating income.