Question
3.Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $1.4 million. Medical Labs will provide the following pattern of cash inflows and
3.Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $1.4 million. Medical Labs will provide the following pattern of cash inflows and synergistic benefits for the next 25 years.There is no tax loss carryforward.
1-56-1516-25
Cash Inflow (after tax)$130,000$150,000$190,000
Synergistic Benefits (after tax)$18,000$28,000$48,000
a.Compute the NPV.
b.Should the merger by undertaken?
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
5th edition
321280299, 321280296, 978-0321280299
