Cash acquisitions of going concerns are best analyzed using ________.

Question

Quizplus · Accepted Answer

Cash acquisitions of going concerns involve a significant investment and should be analyzed using capital budgeting techniques to determine the potential return on investment and the feasibility of the acquisition. Ratio analysis may provide some insight into the financial health of the business, but it does not provide a comprehensive analysis of the acquisition. The weighted marginal cost of capital theory is more relevant for capital budgeting decisions involving multiple sources of financing. The investment opportunity schedule is not a commonly used tool for analyzing cash acquisitions.

Cash Acquisitions of Going Concerns Are Best Analyzed Using ________