Melissas Kitchen, Inc. is considering acquiring Takeshis Takeout Corporation, a small local restaurant chain in Denver, Colorado.

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Melissa’s Kitchen, Inc. is considering acquiring Takeshi’s Takeout Corporation, a small local restaurant chain in Denver, Colorado. Expected net cash flows from the acquisition for the first 4 years of the postmerger period follow. After 4 years, the net cash flows are expected to grow at a constant rate of 5 percent per year. If the appropriate discount rate is 14 percent, what is the most Melissa’s Kitchen should pay for Takeshi’s Takeout?LO1 Year 1 Year 2 Year 3 Year 4 Net cash flows $350,000 $400,000 $475,000 $550,000

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