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Tyson Foods is considering the acquisition of a popular foods company. They estimate the following proforma cash flows for the next 15 years. After-tax hurdle
Tyson Foods is considering the acquisition of a popular foods company. They estimate the following proforma cash flows for the next 15 years. After-tax hurdle rate for Tyson Foods is 6%. Find the NPV and IRR for this acquisition. Should Tyson continue to pursue the acquisition based on the data estimates? Net Estimated Estimated Investment Cash Inflow Cash Outflow Year (mil) (mil) (mil) 2017 $ 17,500.00 2018 $ 8,000.00 $ 7,580.00 2019 $ 8,560.00 S 8,034.80 2020 $ 9,159 20 S 8,516.89 2021 $ 9,800.34 $ 9,027.90 2022 $ 10,486.37 S 9,569.58 2023 $11,220.41 $ 10,143.75 2024 $ 12,005.84 S 10,752.37 2025 $ 12.846.25 S 11,397.52 2026 $ 13,745.49 $ 12,081.37 2027 $ 14,707.67 S 12,806.25 2028 $15.737 21 S 13,574.63 2029 $16,838.82 S 14,389.10 2030 $18.017.53 S 15,252.45 2031 $ 19,278.76 $ 16,167.60 2032 $ 20,628.27 $ 17,137.65 NPV = IRR =
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