A retail organization is considering acquiring a composite textile company.

IIA IIA-CIA-Part3-3P Question Answer

A retail organization is considering acquiring a composite textile company. The retailer's due diligence team determined the value of the textile company to be $50 million. The financial experts forecasted net present value of future cash flows to be $60 million. Experts at the textile company determined their company's market value to be $55 million if purchased by another entity. However, the textile company could earn more than $70 million from the retail organization due to synergies. Therefore, the textile company is motivated to make the negotiation successful. Which of the following approaches is most likely to result in a successful negotiation?

Develop a bargaining zone that lies between $50 million and $70 million and create sets of outcomes between $50 million and $70 million.

Adopt an added-value negotiating strategy, develop a bargaining zone between $50 million and $70 million, and create sets of outcomes between $50 million and $70 million.

Involve a mediator as a neutral party who can work with the textile company's management to determine a bargaining zone.

Develop a bargaining zone that lies between $55 million and $60 million and create sets of outcomes between $55 million and $60 million.

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A retail organization is considering acquiring a composite textile company.

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