u aiue Ul THternational's assets. B5. (NPV of an acquisition) Firm A intends to acquire firm B. The acquisition will cost firm A $170 million. Firm A plans to install new management, "fix" the firm, and sell it at the end of five years. The expected after-tax incremental free cash flow stream firm A expects to realize from the acquisition, which reflects the anticipated operating improvements, is given below. In addition, the expected after-tax sales proceeds amount to $200 milliorn. a. Calculate the NPV of the acquisition assuming a 20% cost of capital. b. Calculate the internal rate of return for the acquisition. c. Calculate the payback period for the acquisition d. Should firm A proceed with the acquisition? YEAR Cash flow ($ millions) 35 35 35 35 35