J & J Enterprises is considering a cash acquisition of Patterson Steel Company for $$5,500,000.$ Patterson will provide the following pattern of cash inflows and synergistic benefits for the next $20$ years. There is no tax loss carryforward. Use Appendix D as an approximate answer, but calculate your final answer using the formula and financial calculator methods.

Years

$156151620$

Cash inflow $($aftertax$)$ $ $590,000$ $ $750,000$ $ $950,000$

Synergistic benefits $($aftertax$)55,00075,00085,000$

The cost of capital for the acquiring firm is $13$ percent.

a$.$ Compute the net present value. $($Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to $2$ decimal places.$)$

b$.$ Should the merger be undertaken?

multiple choice

No

Yes