J & J Enterprises is considering a cash acquisition of Patterson Steel Company for $4,400,000. 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
	15			615			1620
Cash inflow (aftertax)	$	480,000		$	640,000		$	840,000
Synergistic benefits (aftertax)		44,000			64,000			74,000

The cost of capital for the acquiring firm is 11 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?

• Yes

• No