A U.S.firm is acquiring an existing company in Germany rather than starting up a new foreign operation.Which of the following statements best supports this decision?
A)Because the German firm is performing poorly, there is a good turn-around opportunity.
B)The U.S. firm's U.S. facility is working at capacity.
C)Stock market prices have been very high in Germany.
D)The German firm has skilled personnel that the U.S. firm cannot hire at a good price on its own.

Question

Quizplus · Accepted Answer

The best reason to acquire an existing company in Germany rather than starting up a new foreign operation would be that the German firm has skilled personnel that the U.S. firm cannot hire at a good price on its own. This would make the acquisition a more cost-effective option for the U.S. firm, as they can gain access to already-trained personnel without having to pay the high costs of recruitment and training from scratch. None of the other reasons listed would directly support this decision.

A USFirm Is Acquiring an Existing Company in Germany Rather Than