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Firm A expects to have pretax income of $200 and a tax rate of 40% in the coming year. Firm A is evaluating Firm B,
Firm A expects to have pretax income of $200 and a tax rate of 40% in the coming year. Firm A is evaluating Firm B, which has a tax loss carry forward of $100, for an acquisition. If Firm A acquires Firm B, the tax shield from the loss carryforward would be $ and Firm A's net income would be $. Firm A's net income without the acquisition would be .
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