Which of the following is ALWAYS TRUE about the purchases of existing businesses?
A) Once under new ownership, existing businesses outperform initial revenue projections.
B) Once under new ownership, any underlying problems are the responsibility of the new owner.
C) Once under new ownership, consumer curiosity about the new ownership will cause a spike in sales.
D) Once under new ownership, remaining staff are suspicious or fearful of the new owner.
E) Once under new ownership, existing customers will be resentful toward the new owner.
B
Explanation: B) There is no way to predict in advance exactly how a business will perform once it is purchased. Some businesses will do better than expected; others may initially do worse. Any problems that do arise are the responsibility of the new owner; therefore, a careful due diligence process prior to purchase is essential.
You might also like to view...
Which of the following data/tools that inhabit the experience data ecosystem provides purely diagnostic data and no tracking data?
A) customer experience measurement systems B) user testing C) web analytics D) voice-of-the-customer programs
Taffy Company requires customers to pay before products are shipped. On December 26, the company received $14,700 from the Goodie Company. On December 31, Taffy shipped half of the order to Goodie. What adjusting entry, if any, should Taffy make on December 31?
a. Debit Cash and credit Unearned Revenue for $14,700; b. Debit Cash and credit Revenue for $14,700; c. Debit Unearned Revenue and credit Revenue for $14,700; d. Debit Unearned Revenue and credit Revenue for $7,350; e. Taffy should wait until the entire order is shipped before making an adjustment.
Owner's equity is not affected by
a. investments; b. withdrawals by the owner; c. profits; d. losses; e. all transactions
If the exchange rate for Canadian and U.S. dollars is 0.7382 to $1, this implies that 2 Canadian dollars can be purchased for $1.48 U.S. dollars.
Answer the following statement true (T) or false (F)