Present Value

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Net present Value, Mergers and acquisitions Abstract Main objective of undertaking this to report was learn about NPV present value (NPV) method to make capital budgeting decision(Google NEW Project) and success factors involved in mergers and acquisitions(Google-Groupon Case). Answers to the Assignments Part I: Google should go ahead with the new project. Part-II: Google’s acquisition of Groupon would have been win -win situation for both corporations Now I will discuss both parts in detail below. Part I: Capital Budgeting Capital budgeting is the process of making long-term planning decision relating to planning for capital assets as to whether or not money should be invested in the long term projects…show more content…
II - MERGERS AND ACQUISITIONS Assuming rationality from all players, mergers and acquisitions deals originate out of specific strategic corporate requirements. In reality, the advisors (both legal & financial) and middlemen also play a significant role in the original activity. Some of the best acquisition candidates are current business partners. They may be customers who work closely with the buyer to develop new products, or suppliers with whom the buyer has close, long term relationships. However, these targets generally imply either upstream or downstream acquisitions so that the buyer becomes more vertically integrated within its industry and should be a strategic decision by senior management acquirers / targets may focus on competitors for a potential acquisition/sell off. Buying competitor implies horizontal integration. Google-Groupon Case In 2010 there were rumors related to Groupon (online couple provider) being purchased by Google (technical search giant). Google offered around $6 Billion to buy Groupon (daily deals site). It would have been one of the biggest online acquisitions. Groupon became the quickest company to reach sales target of $1 billion. Groupon has done a marvelous work by linking local merchants to a giant e-commerce machine and then successfully delivering
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