Fly$-$By$-$Night Couriers is analyzing the possible acquisition of Flash$-$in$-$the$-$Pan

Restaurants. Neither firm has debt. The forecasts of Fly$-$By$-$Night show that the purchase

would increase its annual aftertax cash flow by $$400,000$ indefinitely. The current market

value of Flash$-$in$-$the$-$Pan is $$12$ million. The current market value of Fly$-$By$-$Night is $$29$

million. The appropriate discount rate for the incremental cash flows is $8$ percent. Fly$-$By$-$

Night is trying to decide whether it should offer $35$ percent of its stock or $$15$ million in

cash to Flash$-$in$-$the$-$Pan.

a$.$

What is the synergy from the merger? $($Do not round intermediate calculations and

enter your answer in dollars, not millions of dollars, e$.$g$.,1,234,567.)$

What is the value of Flash$-$in$-$the$-$Pan to Fly$-$By$-$Night? $($Do not round intermediate

b$.$ calculations and enter your answer in dollars, not millions of dollars, e$.$g$.,$

$1,234,567.)$

What is the cost to Fly$-$By$-$Night of each alternative? $($Do not round intermediate

c$.$ calculations and enter your answers in dollars, not millions of dollars, e$.$g$.,$

$1,234,567.$

What is the NPV to Fly$-$By$-$Night of each alternative? $($Do not round intermediate

d$.$ calculations and enter your answers in dollars, not millions of dollars, e$.$g$.,$

$1,234,567.)$ Fly$-$By$-$Night Couriers is analyzing the possible acquisition of Flash$-$in$-$the$-$Pan Restaurants. Neither firm has debt. The forecasts of Fly$-$By$-$Night show that the purchase would increase its annual aftertax cash flow by $$400,000$ indefinitely. The current market value of Flash$-$in$-$the$-$Pan is $$12$ million. The current market value of Fly$-$By$-$Night is $$29$ million. The appropriate discount rate for the incremental cash flows is $8$ percent. Fly$-$By$-$Night is trying to decide whether it should offer $35$ percent of its stock or $$15$ million in cash to Flash$-$in$-$the$-$Pan.

a$.$ What is the synergy from the merger? $($Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e$.$g$.,1,234,567.)$

b$.$ What is the value of Flash$-$in$-$the$-$Pan to Fly$-$By$-$Night? $($Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e$.$g$.,1,234,567.)$

c$.$ What is the cost to Fly$-$By$-$Night of each alternative? $($Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, e$.$g$.,1,234,567.)$

d$.$ What is the NPV to Fly$-$By$-$Night of each alternative? $($Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, e$.$g$.,1,234,567.)$