Please answer parts a-c i will upvote if correct, thanks.
Quisco Systems has 6.6 billion shares outstanding and a share price of $18.59. Quisco is considering developing a new networking product in house at a cost of $538 million. Alternatively, Quisco can acquire a firm that already has the technology for $878 million worth (at the current price) of Quisco stock. Suppose that absent the expense of the new technology, Quisco will have EPS of $0.99 a. Suppose Quisco develops the product in house. What impact would the development cost have on Quisco's EPS? Assume all costs are incurred this year and are treated as an R&D expense Quisco's tax rate is 35%, and the number of shares outstanding is unchanged. b. Suppose Quisco does not develop the product in house but instead acquires the technology. What effect would the acquisition have on Quisco's EPS this year? (Note that acquisition expenses do not appear directly on the income statement Assume the firm was acquired at the start of the year and has no revenues or expenses of its own so that the only effect on EPS is due to the change in the number of shares outstanding.) c. Which method of acquiring the technology has a smaller impact on earnings? Is this method cheaper? Fxplain a. Suppose Quisco develops the product in house. What impact would the development cost have on Quisco's EPS? Assume all costs are incurred this year and are treated as an R&D expense Quisco's tax rate is 35%, and the number of shares outstanding is unchanged Quisco's new EPS would be $ (Round to the nearest cent) Quisco Systems has 6 6 billion shares outstanding and a share price of $1859. Quisco is considering developing a new networking product in house at a cost of $538 million. Alternatively, Quisco can acquire a firm that already has the technology for $878 million worth (at the current price) of Quisco stock Suppose that absent the expense of the new technology, Quisco will have EPS of $0.99 a. Suppose Quisco develops the product in house. What impact would the development cost have on Quisco's EPS? Assume all costs are incurred this year and are treated as an R&D expense Quisco's tax rate is 35%, and the number of shares outstanding is unchanged b. Suppose Quisco does not develop the product in house but instead acquires the technology. What effect would the acquisition have on Quisco's EPS this year? (Note that acquisition expenses do not appear directly on the income statement Assume the firm was acquired at the start of the year and has no revenues or expenses of its own so that the only effect on EPS is due to the change in the number of shares outstanding VIDELIS b. Suppose Quisco does not develop the product in house but instead acquires the technology. What ettect would the acquisition have on Quisco's EPS this year? (Note that acquisition expenses do not appear directly on the income statement Assume the firm was acquired at the start of the year and has no revenues or expenses of its own so that the only effect on EPS is due to the change in the number of shares outstanding) Quisco's EPS with the purchase is $|| (Round to the nearest cent) c. Which method of acquiring the technology has a smaller impact on earnings? Is this method cheaper? Explain c. Which method of acquiring the technology is cheaper for Quiscol (Select from the drop-down menu) is cheaper for Quisco 1 the number of sha has a smaller impa Developing technology in house Purchasing technology with stock s cheaper for Quis V is cheaper for Quisco
