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a. Suppose that your firm could purchase another firm for only half of its replacement cost. Would that alone be a sufficient justification for merger?

a. Suppose that your firm could purchase another firm for only half of its replacement cost. Would that alone be a sufficient justification for merger? Explain.

b. Suppose that your firm could diversify operation by purchasing another firm. Would diversification alone be a sufficient justification for merger? Explain.

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