XYZ Auto is considering purchasing Southern Auto. XYZs analysts project that the merger will result in incremental net cash flows of $2 million in Year 1, $4 million in Year 2, and EBIT of $25 million and interest expense of $5 million in year 3. Also, in the third year only, it will require reinvestment of an additional 40 percent of its net income to finance future growth, and $117 million in Year 4. The Year 4 cash flow includes a terminal value of $107 million. Assume all cash flows occur at the end of the year. The acquisition would be made immediately, if it is undertaken. Southerns post-merger beta is estimated to be 2.0, and its post-merger tax rate would be 34 percent. The risk-free rate is 8 percent, and the market risk premium is 4 percent. What is the value of Southern Auto to XYZ Auto? If the current market price of the target firm is $500 and the shares outstanding are 100,000. What is the minimum and maximum that a bidder can offer to the target firm?