Which item would not be considered a synergy when evaluating free cash flows for an acquisition?

In the context of evaluating free cash flows for an acquisition, synergies typically refer to the potential benefits that arise when two companies combine, leading to increased efficiencies, revenue enhancements, or cost savings. The correct choice, regarding an item that would not be considered a synergy, is the change in accounting policy that increases reported net income.

Accounting policies are primarily financial frameworks established to guide how financial transactions and events are reported. While a change in accounting policy may result in higher reported net income, it does not reflect a real increase in cash flow or operational efficiencies resulting from the merger or acquisition. Increased net income as a result of accounting policy adjustments does not indicate actual economic benefit or synergy from the merger; instead, it may merely change the way financial performance is reported without affecting cash flow directly.

In contrast, increased market penetration, cost savings through shared resources, and enhanced purchasing power all lead to tangible benefits in cash flow and operational performance resulting from the synergies created by merging operations, consolidating resources, and leveraging market positions, thus contributing directly to the value of the acquisition.