Question
Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $1.5 million. Medical Labs will provide the following pattern of cash inflows and
Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $1.5 million. Medical Labs will provide the following pattern of cash inflows and synergistic benefits for the next 25 years. There is no tax loss carryforward. Use Appendix D.
| Years | |||
| | |||
| 1-5 | 615 | 1625 | |
| Cash inflow (aftertax) | $140,000 | $160,000 | $200,000 |
| Synergistic benefits (aftertax) | 19,000 | 29,000 | 49,000 |
| | |||
| The cost of capital for the acquiring firm is 13 percent. |
| (a) | Compute the net present value. (Round "PV Factor" to 3 decimal places. Round your answer to the nearest whole number and not in millions. Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.) |
Net present value
1
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Behavioral Finance Psychology Decision-Making and Markets
Authors: Lucy Ackert
1st edition
324661177, 978-0538752862, 538752866, 978-1111781675, 1111781672, 978-1133455486, 978-0324661170
