The Clark Corporation desires to expand. It is considering a cash purchase of Kent Enterprises for $4.1 million. Kent has a $920,000 tax loss carryforward that could be used immediately by the Clark Corporation, which is paying taxes at the rate of 35 percent. Kent will provide $520,000 per year in cash flow (aftertax income plus depreciation) for the next 10 years. The discount rate is 8 percent. Use Appendix D as an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a. Compute the net present value.(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b. Should the merger be undertaken?