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Aardvark Software, Inc. can purchase all the stock of Zebra Computer Services for $1,200,000 in cash. Zebra is expected to generate net after-tax cash flows
Aardvark Software, Inc. can purchase all the stock of Zebra Computer Services for $1,200,000 in cash. Zebra is expected to generate net after-tax cash flows of $100,000 per year for each of the next 12 years. Based solely on the cash flow analysis, Aardvark should purchase Zebra only if Aardvark's cost of capital is above 10%. not purchase Zebra Computer Services. purchase Zebra only if Aardvark's cost of capital is between 5% and 10%. purchase Zebra Computer Services. Please explain the logic/math behind the chosen answer. Thanks
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