IIM Ahmedabad - Indian Institute of Management Vastrapur Answered Questions

I think you need to clear the interview stage cut-off for IIM A to get a call and do well in the interview to convert the interview call. It is not a question of how you completed your degree, but how your composite score (as calculated by IIM A; the process is given on the website) compares with others and whether it makes the cut or not. In the interview, it is likely that this question regarding the completion of your degree would come up, but it is a matter of how well you handle the situation that determines your chances.

Since you have completed a 3-year degree in 5 years, I am assuming you have not-that-great academics. If that's the case then getting admission to IIM-A will be difficult even after getting a high percentile as IIM-A gives substantial weightage to academics.

You can start preparing diligently for CAT. If you do not have much idea about CAT, I would suggest you to join a coaching institute with good faculty to help you get the basics right in DILR/Verbal/Quant. After the basics the next challenge is to solve the said question within a stipulated time. Hence, second stage of your preparation should deal with giving mocks and analyzing your mistake repeatedly till CAT.

No MBA in mergers and acquisitions is not offered by IIM Ahmedabad. IIM A only offers degree in general management. Having said that, you can always take electives regarding mergers and acquisition in 2nd year, if you have particular interest in the said topic.

Yes, its worth every penny. The level of faculty, interaction with peer group and learning is unparalleled in India. Hence, its worth it.
Do understand that unlike other government institutes (read IITs/NITs), IIM's do not take any form of monetary support from government. Hence, the complete expense of the education is born by the students itself rather than the tax-payers of India.