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Alpha Corporation is considering acquiring Omega, Incorporated, and has compiled the following information about Omega:YearEBITCapital spendingIncreases in net working capitalDepreciation123$ 318,000 $ 364,000 $ 392,00046,50028,
Alpha Corporation is considering acquiring Omega, Incorporated, and has compiled the following information about Omega:YearEBITCapital spendingIncreases in net working capitalDepreciation123$ 318,000 $ 364,000 $ 392,00046,50028, 00036,2005,5006,5001,20034,00032,10028,700The applicable tax rate is 21 percent and the terminal value of Omega as of Year 3 is $2.5 million. What is the NPV of this acquisition if thediscount rate is 71 percent and the acquisition cost is $2.25 million
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