1. Acquiring Company is considering buying Target Company. Target Company is a small biotechnology firm, which develops products that are licensed to the major pharmaceutical firms? Development costs are expected to generate negative cash flows during the first two years of the forecast period of $(10) and $(5) million, respectively. Licensing fees are expected to generate positive cash flows during years three through five of the forecast period of $6, $11, and $16 million, respectively. Due to the emergence of competitive products, cash flow is expected to grow at a modest 5 percent annually after the fifth year. The discount rate for the first five years is estimated to be 20 percent and then to drop to 10 percent beyond the fifth year. In addition, the present value of the estimated synergy by combining Acquiring and Target companies is $30 million. Calculate the minimum and maximum purchase prices for Target Company.