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3. ABC company is planning to buy the XYZ company. The acquisition would require an initial investment of $190,000, but in one year, ABC company's
3. ABC company is planning to buy the XYZ company. The acquisition would require an initial investment of $190,000, but in one year, ABC company's after-tax net cash flows would increase by $17,000 and remain at this new level annually forever. Assume a cost of capital of 9%. Should ABC buy XYZ? Why
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