In this example: I ONLY need to determine what is "earnings from synergies in year 1

Net Present Value of Synergies

	Year 1	Year 2	Year 3	Year 4	Year 5
Total cash flows from synergies	1.1	1.1	1.1	1.1	1.1
Discount factor	9.58%	9.58%	9.58%	9.58%	9.58%
Present value of cash flows	1.004	0.916	0.836	0.694	0.696
Terminal year value					11.00
Present value of terminal value					6.962
Total net present value of cash flows and terminal value					11.177

Table 13

Post-merger Income Statement and Earnings per Share, Including Synergies

Income Statement	Post-merger Combined
Sales	$1,336.2
Less: Expenses, excluding depreciation	1,183.6
Less: Depreciation	37.4
Earnings before interest and taxes	$115.20
Less: Interest	13.20
Earnings before taxes	$102.0
Less: Taxes (40%)	40.8
Earnings after taxes	$61.20
Earnings from synergies in year 1
Total earnings after taxes, including synergies in year 1
Post-merger shares outstanding (b)	10,900,000
Post-merger earnings per share, including synergies in year 1

I hope I provided enough information. this is a very long problem. This is just a portion of it.

For Reference:

Calculate the free cash flow from the synergies for 5 years, assuming $100,000 of depreciation for each year.

Calculate Admirals required rate of return on equity using the CAPM.

Admirals beta of 1.3, a risk-free rate of 2.0%, and a market risk premium of 7.0%.

Calculate Admirals weighted average cost of capital (WACC).

Assume Admirals cost of debt is 2.4 (after-tax)

Use Admirals market value of equity and book value of debt as its capital structure for the WACC calculation.

Develop the terminal year value of the synergies based on the fifth year of the cash flows.

Assume the growth rate of the synergistic cash flows after the terminal year is 1.0%.

Determine the net present value of the cash flows resulting from synergies.

Assume that the earnings due to synergies end after 5 years.

Determine the EPS of the combined company in Year 1 if these synergies occur.

Use the Admiral Foods post-merger income statement you calculated for this final project and the shares outstanding you calculated using an exchange ratio of 0.45.

Include the net earnings after-tax from the synergies to determine the total, combined net earnings after-tax.

Use the total, combined net earnings after-tax to compute the EPS.

Admiral Foods Corporation Balance Sheet (in Millions of Dollars) \begin{tabular}{lrlr} \hline Current assets & $225 & Current liabilities & $101 \\ Fixed assets, net & 307 & Long-term debt & 106 \\ & & Common equity (10,000,000 shares) & 15325 \\ \multicolumn{1}{l}{ Total assets } & $532 & Total liabilities and equity & $532 \\ \hline \end{tabular} Admiral Foods Corporation Income Statement (in Millions of Dollars) Favorite Food Systems, Inc. Balance Sheet (in Millions of Dollars) \begin{tabular}{lrlr} \hline Current assets & $10.6 & Current liabilities & $6.5 \\ Fixed assets, net & 12.1 & Long-termdebtCommonequity & 2.2 \\ Total assets & $22.7 & (2,000,000 shares ) \\ & & Total liabilities and equity & $22.714.0 \\ \hline \end{tabular} Favorite Food Systems, Inc. Income Statement (in Millions of Dollars) Sales$752 Less: Expenses, excluding depreciation Less: Depreciation Earnings before interest and taxes Less: Interest Earnings before taxes Less: Taxes (40\%) Earnings after taxes Additional Information \begin{tabular}{lcc} \hline & AdmiralFoodsCorporation & FavoriteFoodSystems \\ \hline Dividends per share & $2.50 & $0.60 \\ Common stock (price per share) & $50 & $15 \\ \hline \end{tabular} Admiral Foods Corporation Balance Sheet (in Millions of Dollars) \begin{tabular}{lrlr} \hline Current assets & $225 & Current liabilities & $101 \\ Fixed assets, net & 307 & Long-term debt & 106 \\ & & Common equity (10,000,000 shares) & 15325 \\ \multicolumn{1}{l}{ Total assets } & $532 & Total liabilities and equity & $532 \\ \hline \end{tabular} Admiral Foods Corporation Income Statement (in Millions of Dollars) Favorite Food Systems, Inc. Balance Sheet (in Millions of Dollars) \begin{tabular}{lrlr} \hline Current assets & $10.6 & Current liabilities & $6.5 \\ Fixed assets, net & 12.1 & Long-termdebtCommonequity & 2.2 \\ Total assets & $22.7 & (2,000,000 shares ) \\ & & Total liabilities and equity & $22.714.0 \\ \hline \end{tabular} Favorite Food Systems, Inc. Income Statement (in Millions of Dollars) Sales$752 Less: Expenses, excluding depreciation Less: Depreciation Earnings before interest and taxes Less: Interest Earnings before taxes Less: Taxes (40\%) Earnings after taxes Additional Information \begin{tabular}{lcc} \hline & AdmiralFoodsCorporation & FavoriteFoodSystems \\ \hline Dividends per share & $2.50 & $0.60 \\ Common stock (price per share) & $50 & $15 \\ \hline \end{tabular}