B Ltd planning to merge with T Ltd. B Itd projected that the recurring annual pretax cost saving of 5 crore starting from 2021 this cost reduction would rise from reductions in administrative, R&D, & marketing cost. They also projected total revenue loss of 2 crore starting in the same year as a result of consolidation of product lines and other merger cost. The firms profit margin is 20% the tax rate is 30% and the discount rate is 15%. Synergy will grow at the rate of inflation i.e. 4%. No of Share O/S Market Price What is the NPV of annual synergy as of 2019? 250 lakh Calculate the maximum value B Itd should pay to T Ltd for this deal. T Ltd 100 lakh 30 Co B Ltd 40