The July 6, 1995, edition of The Wall Street Journal includes an article by Jim Carlton and David P. Hamilton entitled "Packard Bell Sells 20\% Stake to NEC for \(\$ 170\) Million; Deal Gives Japanese Firm Unprecedented Access to the U.S. PC Market."

\section*{Instructions}

Read the article and answer these questions:

(a) Why did Packard Bell sell shares to NEC?

(b) Identify a similar transaction between two other computer companies.

(c) Under U.S. GAAP, how would NEC account for its investment in Packard Bell?

(d) Packard Bell was considering a sale of common shares to the general public. Why didn't it select this option?