16. Kojack Film needs silver to make photographic film.To ensure that they will have an ample supply of silver at areasonable price, the company purchases a silver mine. This is anexample of a(n) _____________.
A. horizontal acquisition
B. hostile takeover
C. acquisition of liquid assets
D. conglomerate acquisition
E. vertical acquisition

17. FirstGuppy Corp. has just received a purchase offerfrom FirstShark, an unfriendly suitor. Instead of accepting theoffer, FirstGuppy attempts to merge with FirstMolly, a friendlyalternative suitor. FirstMolly is a ______ in thisinstance.
A. golden parachute
B. shark repellent
C. white knight
D. crown jewel
E. lockup

18. Which of the following represent potential gainsfrom an acquisition?
I. The replacement of ineffective managers
II. Lower costs per unit produced
III. An increase in firm size so that diseconomies of scale arerealized
IV. Spreading of overhead costs
A. II and III only
B. I and IV only
C. I, II, and IV only
D. I, III, and IV only
E. I, II, III, and IV

19. One legitimate advantage to leasing isthat:
A. Leasing provides 100% financing.
B. Leasing provides a source of off-balance sheet financing.
C. By leasing, the lessee's income statement will bestronger.
D. Taxes may be reduced by leasing.
E. Unlike borrowing and purchase, leasing decreases a firm'sfinancial leverage.

20. Which of the following describe(s) a financiallease?

I. The lease is cancellable at the option of the lessee.
II. The term of the lease is usually long-term.
III. The lessee is typically required to maintain the asset.
A. I only
B. I and II only
C. I and III only
D. II and III only
E. I, II, and III