1. Milton Mule Company is considering the purchase of Fast Horse Company at a price of $190,000. If Milton makes the acquisition, its after-tax net cash flows will increase by $30,000 per year and remain at this new level forever. If the appropriate cost of capital is 15 percent, should Milton Mule buy Fast Horse?
   1. Yes, because the NPV = $30,000
   2. Yes, because the NPV = $200,000
   3. Yes, because the NPV = $10,000
   4. No, because NPV < 0.
   5. There is not enough information given to answer this question.