=+LG 3 P18–4 Asset acquisition decision Plumbing Company is evaluating a proposal to acquire Bathroom Goodies at a cash price of $75,000. Bathroom Goodies has liabilities of

$90,000 and has some particular assets that Plumbing Company needs. Plumbing Company will sell the other assets that it does not need for a net price of $62,500, after the acquisition. It is estimated that Plumbing Company’s cash flows will increase

$25,000 per year over the next 10 years. The firm has a cost of capital of 12.5%.