Practice Problem – NPV

Practice Question

Cases in Finance
Mergers and Acquisitions
NPV
Short Answer

What is the main technique used to assess the potential value of a merger?

Answer +
B
Explanation +

NPV analysis is the primary technique used to assess the potential value of a merger. It involves estimating the present value of expected future cash inflows from the merger and comparing it against the costs associated with the transaction. A positive NPV indicates that the merger is expected to create value for shareholders.