Which of the following makes acquisition an attractive approach to diversifying into another industry?

Multiple Choice

• If it is not time-consuming and allows the firm to realize great profits and a sustainable competitive advantage

• Only if it is less expensive, less risky, and more effective than launching a new startup operation

• If it satisfies all three diversity tests (industry attractiveness test, cost-of-entry-test, better-off test) to grow shareholder value over the long term

• If it is quicker than trying to launch a brand-new operation, offers an effective way to hurtle entry barriers, and allows the acquirer to move directly to the task of building a strong position in the target industry

• If due diligence and integration can be done easily and at low cost