Multiple Questions Answers

1. The incremental cash flow principle claims that sunk costs must be taken into account in the firm's decision whether to accept or reject a project.

2. The terms "acquisition" and "takeover" are often used to refer to a merger because the stock of the firm that goes out of existence is usually acquired by the continuing firm.

3. A consolidation occurs when all of the combining legal entities dissolve, and a new entity with a new name is formed to continue into the future.

4. The category of business combination where the firms have a supplier-customer relationship is known as a