AA plc is asking a price of RM58 million to be purchased by CC plc. The two firms currently have cumulative total cash flows of RM8.5 million (RM5.5 million from CC plc and RM3 million from AA plc) which are growing at 2 per cent annually for both firms. Managers of CC plc estimate that, because of synergies, the merged firms cash flows will increase by an additional 4 per cent for the first four years following the merger. After the first four years, incremental cash flows will grow at the rate of 2 per cent for the foreseeable future. The cost of capital for the merged firms is 9 per cent. Required: a) Describe a merger, an acquisition and a consolidation. b) Using NPV, evaluate whether or not CC plc should acquire AA plc.