Acquisition of an existing business

Question

Explain about the acquisition of an existing business.

Answer 1

The acquisition of an existing business:

1. The Acquisition is the most famous means of diversifying into another industry.

2. However, finding the right organization to acquire sometimes presents a challenge.

3. The big quandary an acquisition-minded firm faces is whether to pay a best price for a winning firm or to purchase a struggling organization at a bargain price.

4. The cost of entry test needs that the expected profit streams give an attractive return on the total acquisition cost and on new capital investment required expand or sustain its operations.