Question 1: In a merger, the acquiring firm assumes all liabilities of the target firm. Assumed liabilities include all but one of the following?

a. Current liabilities

b. Long-term debt

c. Warranty claims

d. Depreciated operating equipment

e. Off-balance sheet liabilities

Question 2: All of the following are true of buyer due diligence except for:

a. Due diligence is the process of validating assumptions underlying valuation

b. Can be eliminated and replaced by appropriate representations and warranties in the agreement of purchase and sale

c. A primary objective is to identify the sources and destroyers of value

d. Always consists of operational, financial, and legal reviews

e. Endeavors to identify the