The net present value of an acquisition should have no bearing on whether or not the acquisition occurs.

Question

Quizplus · Accepted Answer

The net present value (NPV) is a crucial financial metric used to assess the profitability of an acquisition. A positive NPV indicates that the acquisition is expected to generate more value than its cost, making it a potentially good investment. Conversely, a negative NPV suggests that the acquisition would destroy value, which could be a reason to reconsider or avoid it. Therefore, the NPV should significantly influence the decision on whether or not an acquisition occurs.

The Net Present Value of an Acquisition Should Have No