Birdie Golf, Inc., has been in merger talks with Hybrid Golf Company for the past six months. After several rounds of negotiations, the offer under discussion is a cash offer of $352 million for Hybrid Golf. Both companies have niche markets in the golf club industry, and the companies believe a merger will result in significant synergies due to economies of scale in manufacturing and marketing, as well as significant savings in general and administrative expenses. Bryce Bichon, the financial officer for Birdie, has been instrumental in the merger negotiations. Bryce has prepared the following pro forma financial statements for Hybrid Golf assuming the merger takes place. The financial statements include all synergistic benefits from the merger:

2019 2020 2021 2022 2023 Sales $409,600,000 $460,800,000 $512,000,000 $576,000,000 $640,000,000 Production costs 287,400,000 332,500,000 358,400,000 404,500,000 451,200,000 Depreciation 38,400,000 40,900,000 42,300,000 42,500,000 43,900,000 Other expenses 40,900,000 46,100,000 51,200,000 57,900,000 63,100,000 EBIT $ 42,900,000 $ 51,300,000 $ 60,100,000 $ 71,100,000 $ 81,800,000 Interest 9,730,000 11,260,000 12,300,000 12,800,000 13,800,000 Taxable income $ 33,170,000 $ 40,040,000 $ 47,800,000 $ 58,300,000 $ 68,000,000 Taxes (25%) 8,292,500 10,010,000 11,950,000 14,575,000 17,000,000 Net income $ 24,877,500 $ 30,030,000 $ 35,850,000 $ 43,725,000 $ 51,000,0002019 2020 2021 2022 2023 Investments: Net working capital $10,200,000 $12,800,000 $12,800,000 $15,400,000 $15,400,000 Fixed assets 7,700,000 13,800,000 9,300,000 31,400,000 3,900,000 Total $ 17,900,000 $26,600,000 $22,100,000 $46,800,000 $19,300,000 Sources of financing: New debt $17,900,000 $ 9,200,000 $ 8,200,000 $15,000,000 $ 6,100,000 Profit retention 0 17,400,000 13,900,000 31,800,000 13,200,000 Total $ 17,900,000 $26,600,000 $22,100,000 $46,800,000 $19,300,000