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LOML, eccept lestion 9, which is worth 10 points. Il Hohe of the numbers Jt Tumber of the ones provided. All questions are worth Question

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LOML, eccept lestion 9, which is worth 10 points. Il Hohe of the numbers Jt Tumber of the ones provided. All questions are worth Question 4. Juicers Inc. is thinking of acquiring Fast Fruit Company. Juicers expects Fast Fruit's NOPAT to be $9 million the first year, with no net new investment in operating capital and no interest expense. For the second year, Fast Fruit is expected to have NOPAT of $25 million and interest expense of $5 million. Also, in the second year only, Fast Fruit will need $10 million of t new investment in operating capital. Fast Fruit's marginal tax rate is 40%. After the second year, the free cash flows and the tax shields from Fast Fruit to Juicers will both grow at a constant rate of 4%. Juicers has determined that Fast Fruit's cost of equity is 17.5%, and Fast Fruit currently has no debt outstanding. Assume that all cash flows occur at the end of the year, Juicers must pay $45 million to acquire Fast Fruit. What it the NPV of the proposed acquisition? Note that you must first calculate the maximum value to Juicers of Fast Fruit's equity $45.0 million b. $68.2 million C$86.5 million d. $113.2 million e. $133.0 million

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