Company A with excess cash is considering the acquisition of company B. Company A estimates of Bs earnings potential if it comes under As management (in millions of dollars). The interest expense listed here includes the interest (1) on Bs existing debt, (2) on new debt that A would issue to help finance the acquisition, and (3) on new debt expected to be issued over time to help finance expansion within the new B division, the code name given to the target firm. The retentions represent earnings that will be reinvested within the B division to help finance its growth. Company B currently uses 35% debt financing, and it pays federal-plus-state taxes at a 35% rate. Security analysts estimate Bs beta to be 1.36. If the acquisition were to take place, As would increase Bs debt ratio to 40%, which would increase Bs beta to 1.48. Further, because company A is highly profitable, taxes on the consolidated firm would be 40%. Depreciation cash flows would have to be reinvested within the division to replace worn-out equipment. You estimate the risk-free rate to be 4% and the market risk premium to be 8%. You also estimate that cash flows after 2021 will grow at a constant rate of 6%. The after tax cost of debt is 7%. The table presents estimates of the company Bs data for merger analysis.

	2018	2019	2020	2021
Net Sales	60,000,000	80,000,000	100,000,000	130,000,000
COGS	30,000,000	50,000,000	75,000,000	92,000,000
Selling & Admin Expenses	4,000,000	6,000,000	8,000,000	9,000,000
Interest Expense	2,000,000	3,000,000	4,000,000	5,000,000
Necessary Retained Earnings	2,000,000	7,000,000	9,000,000	8,000,000

What is the cash flow for year 2021 (The cash flow to be used for merger analysis)?

A. 75,343,089.43

B. 18,400,000

C. 55,369,178.47

D. 68,247,308.24

E. 15,400,000