a) A merger is defined as the combination of two or more firms, in which the resulting firm maintains the identity of one of the firms, usually the larger one. Discuss the motives of Merger?

(5: Marks)

b) Payback period is the time in which the initial cost of an investment is expected to be recovered through the cash inflows generated by the investment. Briefly discuss the pros and cons of payback period?

(5: Marks)

c) One major difference in perspective and emphasis between finance and accounting is that accountants generally use the accrual method while in finance; the focus is on cash flows. Briefly discuss the differences between accrual method and cash method?