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Homework: Assignment 8 Save Score: 0 of 9 pts 2 of 12 (0 complete) HW Score: 0%, 0 of 100 pts Warm-Up 18-2 (similar to)
Homework: Assignment 8 Save Score: 0 of 9 pts 2 of 12 (0 complete) HW Score: 0%, 0 of 100 pts Warm-Up 18-2 (similar to) Question Help Cautionary Tales, Inc., is considering the acquisition of Danger Corp. at its asking price of $140,000. Cautionary would immediately sell some of Danger's assets for $14,000 if it makes the acquisition. Danger has a cash balance of $1,400 at the time of the acquisition. If Cautionary believes it can generate after-tax cash inflows of $28,000 per year for the next 7 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 9% cost of capital. The net present value of the acquisition is $ . (Round to the nearest dollar.)
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