Velcro Saddles is contemplating the acquisition of Skiers Airbags Incorporated. The values of the two companies as separate entities are $30 million and $15 million, respectively. Velcro Saddles estimates that by combining the two companies, it will reduce marketing and administrative costs by $550,000 per year in perpetuity. Velcro Saddles is willing to pay $18 million cash for Skiers. The opportunity cost of capital is 10%.

What is the gain from the merger?

Note: Enter your answer in millions rounded to 2 decimal places.

What is the cost of the cash offer?

Note: Enter your answer in millions.

What is the NPV of the acquisition under the cash offer?

Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.