| Line | Findings from several studies on corporate mergers |
| and acquisitions during the 1970’s and 1980’s raise | |
| questions about why firms initiate and consummate | |
| such transactions. One study showed, for example, | |
| (5) | that acquiring firms were on average unable to |
| maintain acquired firms’ pre-merger levels of | |
| profitability. A second study concluded that post- | |
| acquisition gains to most acquiring firms were not | |
| adequate to cover the premiums paid to obtain | |
| (10) | acquired firms. A third demonstrated that, following |
| the announcement of a prospective merger, the | |
| stock of the prospective acquiring firm tends to | |
| increase in value much less than does that of the | |
| firm for which it bids. Yet mergers and acquisitions | |
| (15) | remain common, and bidders continue to assert |
| that their objectives are economic ones. | |
| Acquisitions may well have the desirable effect of | |
| channeling a nation’s resources efficiently from less | |
| to more efficient sectors of its economy, but the | |
| (20) | individual acquisitions executives arranging these |
| deals must see them as advancing either their own | |
| or their companies’ private economic interests. It | |
| seems that factors having little to do with corporate | |
| economic interests explain acquisitions. These | |
| (25) | factors may include the incentive compensation of |
| executives, lack of monitoring by boards of | |
| directors, and managerial error in estimating the | |
| value of firms targeted for acquisition. Alternatively, | |
| the acquisition acts of bidders may derive from | |
| (30) | modeling: a manager does what other managers do. |
The author of the passage mentions the effect of acquisitions on national economies most probably in order to

The flowchart represents a mathematical algorithm that takes two positive integers as the input and returns a positive integer as the output. Processes are indicated in the rectangular symbols in the flowchart. Each process is symbolized by an equation, such as T = T + a. In this particular process, the current values of the variables T and a are added together and the sum then becomes the value of T. For example, if the value of T is 3 and the value of a is 7 before the process T = T + a is completed, then the value of T is 10 and the value of a is 7 after the process is completed.
Use the drop-down menus to fill in the blanks in the following statements based on the algorithm represented by the flowchart.
If 24 and 35 are entered as the values for a and b, respectively, then the first nonzero value of T is .
If 35 and 27 are entered as the values for a and b, respectively, then after the process $$b = rac{b}{2}$$ is completed for the second time, the value of b is .