Net Present Value, Mergers and Acquisitions
Abstract One financial goal of financial managers is to maximize the shareholders’ wealth. Therefore, merger and acquisition decisions should be consistent with shareholder wealth maximization, and financial characteristics of the targets to consider in the decision-making process. The net present value method is one of the useful methods that help financial managers to maximize shareholders’ wealth. The capital budgeting decision mergers Acquisitions
Net Present Value
Financial managers are working for the shareholders and their primary goal is profit maximization in order to maximize the wealth of the company and the shareholders. The Capital budgeting decision focuses on the net present value method, the payback period, and the internal rate of return method. This paper has two parts, where the first aspect relates to the capital budgeting decision. This paper will recommend if Goggle should accept a new project by using the net present value method. Next, the paper will discuss Google 's potential acquisition of Groupon and if it will add value to the shareholders of both corporations. Finally, this paper will make a recommendation to Goggle and Groupon on the best course of action for a merger or acquisition.
Part I
First, a financial manger has to make optimal decisions they will benefit the company. A financial manger has to know how to make money and smart investments in order to raise capital and put the money back into the company. The net present value is an important concept and useful tool to use to help financial managers make informed financial decisions. For instance, the net present value concept works with the capital budgeting decision to make an informed decision on a project and the potential for profits. In addition, net present value compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account because dollar today
Net Present Value
Financial managers are working for the shareholders and their primary goal is profit maximization in order to maximize the wealth of the company and the shareholders. The Capital budgeting decision focuses on the net present value method, the payback period, and the internal rate of return method. This paper has two parts, where the first aspect relates to the capital budgeting decision. This paper will recommend if Goggle should accept a new project by using the net present value method. Next, the paper will discuss Google 's potential acquisition of Groupon and if it will add value to the shareholders of both corporations. Finally, this paper will make a recommendation to Goggle and Groupon on the best course of action for a merger or acquisition.
Part I
First, a financial manger has to make optimal decisions they will benefit the company. A financial manger has to know how to make money and smart investments in order to raise capital and put the money back into the company. The net present value is an important concept and useful tool to use to help financial managers make informed financial decisions. For instance, the net present value concept works with the capital budgeting decision to make an informed decision on a project and the potential for profits. In addition, net present value compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account because dollar today
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