J & J Enterprises is considering a cash acquisition of Patterson Steel Company for $4,800,000. Patterson will provide the following pattern of cash inflows and synergistic benefits for the next 20 years. There is no tax loss carry-forward.

Years

1-56-1516-20Cash inflow (aftertax)$520,000$680,000$880,000Synergistic benefits (aftertax)$ 48,000$ 68,000$ 78,000

The cost of capital for the acquiring firm is 11 percent.

a.Calculate the net present value.(Use a Financial calculator to arrive at the answers. Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to nearest whole dollar.)

Net present value$

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