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The Charles Corporation desires to expand. It is considering a cash purchase of Atlas Enterprises for $2,400,000. The Atlas Corporation has a $650,000 tax loss
The Charles Corporation desires to expand. It is considering a cash purchase of Atlas Enterprises for $2,400,000. The Atlas Corporation has a $650,000 tax loss carry-forward that could be used immediately by the Charles Corporation, which is paying taxes at the rate of 40 percent. Atlas will provide $350,000 per year in cash flow (aftertax income plus CCA) for the next 25 years. a. If the Charles Corporation has a cost of capital of 13 percent. compute the net present value. (Use a Financial calculator to arrive at the answers. Negative answer should be indicated by a minus sign. Round the final answer to the nearest whole dollar.) Net present value $
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