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McGraw Trucking Company is considering a cash acquisition of Hill Storage Company for $2.4 million. Hill Storage will provide the following pattern of cash inflows

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McGraw Trucking Company is considering a cash acquisition of Hill Storage Company for $2.4 million. Hill Storage will provide the following pattern of cash inflows and synergistic benefits for the next 20 years. There is no tax loss carry forward. Cash inflow (aftertax) Synergistic benefits (aftertax) 1-5 $330,000 $43,000 Years 6-15 $370,000 $63,600 16-20 3450,000 $100,000 The cost of capital for the acquiring firm is 12 percent a. Calculate the net present value. (Use a Financial calculator to arrive at the answers. Ensure to provide the answer in whole dollars, not in millions. Do not round intermediate calculations, Round the final answer to nearest whole dollar. Omit $ sign from the answer value. Negative answer should be indicated by a minus sign.) Net present value b. Should the merger be undertaken NO Yes

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