There is a firm, which we are prospecting as a purchase candidate. It has the following features we find attractive. First, it will enable us to sell to the clients of this firm what we already are selling our existing clients. The revenue addition will be $12 million. However, it will induce $3million more expenses in attaining that higher level of revenue. Secondly, it will enable us to sell a division of the firm that does not really connect with our operations for $5 million. Thirdly, since there is a lot of repetition of positions ( we are in the same line of business) we can lay off 50 employees permanently. The average salary of those employees is $60,000. The WACC of the firm is 10%. The coe is 16%.

Calculate the amount that we can bid to acquire this company