Jackson Ltd is considering acquiring Janet Ltd. Jackson believes that the combination would increase its cash inflows by $25,000 for each of the next five years and by $50,000 for each of the following five years. Janet has high financial leverage, and Jackson can expect its cost of capital to increase from 12% to 15% if the merger is undertaken. The cash price of Janet is $125,000. Use NPV to answer the following: a Would you recommend the merger? (8 marks) b Would you recommend the merger if Jackson could use the $125,000 to purchase machinery that would return cash inflows of $40,000 per year for each of the next ten years? (6 marks) c If the cost of capital did not change with the merger, would your decision in part (b) be different? Explain. (5 marks) d Briefly describe two defensive tactics that can be used by Janet Ltd. (6 marks)