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Question 25 (Mandatory) (3 points) Windows N Such, Inc., is asking a price of $195 million to be purchased by Curtain Rods Corp. The two

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Question 25 (Mandatory) (3 points) Windows N Such, Inc., is asking a price of $195 million to be purchased by Curtain Rods Corp. The two firms currently have cumulative total cash flows of $15 million which are growing at 1 percent annually. Managers estimate that because of synergies the merged firm's cash flows will increase by an additional 3 percent for the first four years following the merger. After the first four years cash flows will grow at a rate of 2 percent. The WACC for the merged firms is 10 percent. Calculate the NPV of the merger. Should Curtain Rods Corporation agree to acquire Windows N Such, Inc., for the asking price of $195 million? a. Yes, the NPV is greater than or equal to SO b. Yes, the NPV is less than or equal to SO c. No, the NPV is greater than or equal to $0 d. No, the NPV is less than or equal to SO O Option A O Option B Option C Option D

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