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Please solve this as soon as possible XYZ company is planning to buy the ABC company. The acquisition would require an initial investment of $210,000,
Please solve this as soon as possible
XYZ company is planning to buy the ABC company. The acquisition would require an initial investment of $210,000, but in one year XYZ company's after-tax net cash flows would increase by $20,000 and remain at this new level annually forever. Assume a cost of capital of 9%. Should XYZ buy ABC?
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