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Weston Hep Cash acquisition decision Benson Oil is being considered for acquisition by Dodd Oil The combination, Dodd believes, would increase its cash inflows by

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Weston Hep Cash acquisition decision Benson Oil is being considered for acquisition by Dodd Oil The combination, Dodd believes, would increase its cash inflows by $25,000 for each of the next 5 years and by $52,000 for each of the following 5 years. Benson has high financial leverage, and Dodd can expect its cost of capital to increase from 11% to 14% if the merger is undertaken. The cash price of Benson is $135,000 a. Would you recommend the merger? b. Would you recommend the merger if Dodd could use the $135,000 to purchase equipment that will return cash inflows of $36,000 per year for each of the next 10 years? a. The nel present value of the merger is SL (Round to the nearest cent)

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