8. Wansley Corp is evaluating the acquisition of Alabama Company. Wansleys analyst projects the following post merger cash flows for Alabama Company if purchased by Wansley. Year 1 Year 2 Net Sales $540 $600 Oper Expenses 350 360 Interest 24 30 Depreciation 10 10 Net Investment 10 10 In Operating Capital The current market beta for Alabama Company is 1.2 and its tax rate is 25% before the merger and 25% after the merger and has a current debt ratio of 60%. Assume a market return of 8% and a risk free rate of 3%.

d. Find the value of company operations. (no non-operating assets)