=+Lanes' management believe that the ten shops will be a perfect fit with their own. There are
Question:
=+Lanes' management believe that the ten shops will be a perfect fit with their own.
There are no towns in which they both trade, and economies of scale can be obtained. Suppliers will grant quantity discounts which will save fim per annum.
Combined transportation costs will fall by £200,000 per year and administration costs can be cut by £150,000 per year. These savings will remain constant for all future years, In addition, the distribution depot used by the ten shops could be closed and sold for £1.8m with no adverse impact on trading. Calculate the value of the ten shops to Lanes' shareholders on the assumption that the required return remains at 13 per cent and underlying growth continues at its historic rate.
9
Step by Step Answer:
Corporate Financial Management And How To Write Essays And Assignments
ISBN: 978-1405882897
Coursepack Edition
Authors: Glen Arnold