1.

The factors that should be considered in analyzing the impact of the given merger on the income statement are:

• Synergy: In merger, the combined value of two companies are always more than the individual value of company is called synergy. When the merger increase the efficiency and its economic of scale, it is said that synergy of companies inclined effectively to benefit the company at large.

• Cost savings: Merger helps in using the each other companies’ resources which ultimately save cost for the company. Merged company used experienced employees of other company; assets are used to conduct business in more efficient manner; etc. It also get expert personnel of other company in much lower cost.

• Increased in revenue: Merger increases the capacity of production which resultant in increase in revenue for company.

• Global market: More production leads the company to expand in markets of merged companies. This increases its reach to global market which flourish its business in international market.

• Access to new market: Merger of companies open new avenues of investment for company. It provides positive environment within the company which is helpful in developing new ideas to access new market to acquire and attract more consumer towards its product.