Powell Corporation paid $15 million in cash to acquire the assets and liabilities of Sloan Company. Powell also agreed to make an additional cash payment in the future, with an expected present value of $600,000, if certain performance targets are met. Powell paid legal and consulting fees of $300,000 in cash in connection with the merger. A comparison of book and fair values of Sloans reported assets and liabilities follows:

(in thousands) Book Value Fair Value

Current assets.. $ 600 $ 450

Property and equipment, net 5,000 2,000

Patents and trademarks 200 1,800

Current liabilities.. (400) (400)

Long-term debt.. (3,000) (3,200)

Net assets $2,400 $ 650

Sloan also has previously unreported developed technology, valued at $1.2 million, meeting ASC Topic 805 criteria for capitalization.

Required

1. What is the acquisition cost for this transaction?