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Getz Company is considering acquiring Koh Company for P40,000. Koh has a total liabilities of P62,000. After the merger, Getz will only use one equipment
Getz Company is considering acquiring Koh Company for P40,000. Koh has a total liabilities of P62,000. After the merger, Getz will only use one equipment owned by Koh and the other assets can be disposed for P55,000. The equipment can generate an increase in annual cash flow of P7,000 per year for the next 10 years. Getzs cost of capital is 12%. Should the acquisition be made?
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