NPR MedTech Corporation is considering acquiring IV Pumps, Inc., a relatively small company that manufactures intravenous pumps for use by hospitals. NPR MedTech believes it can grow IV Pump's sales by 30 percent per year for the first 5 years after it acquires the firm. In the year just ended, IV Pumps sales were $1 million. Operating expenses (cost of goods plus selling, general, and administra- tive expenses) are projected to equal 60 percent of sales. Depreciation expense is forecasted to be $100,000, $150,000, $175,000, $200,000, and $225,000, respectively, for the next 5 years. Retentions to sustain the business are expected to equal $225.000 per year for the next 5 years. After 5 years, net cash flows are expected to grow at a constant rate of 6 percent. NPR MedTech's tax rate is 40 percent. Assum- ing that the appropriate cost of capital for discounting the cash flow is 12 percent, what is the maximum NPR MedTech should pay for IV Pumps?LO1