Question
Consider the acquisition of Anchor Hocking as described on pages 3 and 4 of the case. Further consider that prior to the acquisition, the sales
Consider the acquisition of Anchor Hocking as described on pages 3 and 4 of the case. Further consider that prior to the acquisition, the sales of Anchor Hocking were $757 million, the existing profit margin of Anchor Hocking was 0.5%, and Newell's own profit margin was 11% (as opposed to operating profit targets discussed elsewhere). Finally, note that Newell reduced two core cost items by $12 million and $32.4 million. Let's also assume that the workforce reduction resulted in eliminated costs of $20,000 for each of the 1,400 employees let go, and the reduction of product lines reduced the original costs by another 5% but had no impact on sales.With these changes what would the new profit margin be for the acquired firm?
Question 2 options:
A) 11.3%
B) 6.4%
C) 6.9%
D) 15.0
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