Which of the following is not true about why firms prefer to acquire existing assets rather than undertake greenfield investments?
A) Foreign firms are acquired because those firms have valuable strategic assets.
B) Firms make acquisitions because they believe they can increase the efficiency of the acquired unit by transferring capital, technology, or management skills.
C) Firms make acquisitions because they believe it will make more profits for the home firm and home country.
D) Mergers and acquisitions are quicker to execute than greenfield investments.
E) Mergers and acquisitions are cheaper than greenfield investments.

Question

Quizplus · Accepted Answer

The primary motivations for firms to acquire existing assets rather than undertake greenfield investments include gaining valuable strategic assets, increasing efficiency through the transfer of resources, and the speed of execution. The statement that firms make acquisitions because it will make more profits for the home firm and home country (C) does not accurately capture the nuanced strategic considerations firms undertake in these decisions, as the primary focus is on the acquiring firm's benefits rather than the broader economic impact on the home country.

Which of the Following Is Not True About Why Firms