Question

The cash flows used to analyze Mergers & Acquisitions: Group of answer choices Are before tax....

The cash flows used to analyze Mergers & Acquisitions:

Group of answer choices

Are before tax.

Are the same as those used in regular capital budgeting analysis.

Exclude interest and depreciation on a before-tax basis; and then adds back depreciation and subtracts retained earnings.

Generally do not account for revenue and expenses.

Both C and D.

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Answer #1

The cash flows which are used to analyse mergers and acquisitions-

A. Will be generally before the tax-the estimation of the cash flows involved will not be ascertaining the rate of the taxation so these cash flows are generally pre tax.

D. They are generally excluding interest and depreciation on before tax basis and then they will be adding back depreciation and subtracting retained earnings.

Rest of the statements are not true because it is not used in capital budgeting or they generally account for revenue and expenses.

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