Aussie Ltd is considering the acquisition of Kiwi Ltd. The values of the two companies as separate entities are $20 million and $10 million, respectively. Each firm has 2 million shares outstanding. Aussie estimates that by combining the two companies, it will reduce the selling and administrative costs by $150,000 p.a. in perpetuity with no change in risk. Assume the cost of capital for the new firm is 10% p.a.

What is the total gain, in present value terms, from the merger?

	a.	$500,000
	b.	$150,000
	c.	$1,500,000
	d.	$1,000,000
	e.	None of the above

plz answer quick