Cautionary Tales, Inc., is considering the acquisition of Danger Corp. at its asking price of $150,000. Cautionary would immediately sell some of Danger's assets for $15,000

if it makes the acquisition. Danger has a cash balance of $1,500 at the time of the acquisition. If Cautionary believes it can generate after-tax cash inflows of

$20,000 per year for the next 5 years from the Danger acquisition, should the firm make the acquisition? Base your recommendation on the net present value of the outlay using Cautionary's 11% cost of capital.

The net present value of the acquisition is

Based on the NPV, should Cautionary make the acquisition?