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You are presented with the following estimates of the revenue enhancement of a merger. Now, assume that CFO is performing sensitivity analysis and alters the

You are presented with the following estimates of the revenue enhancement of a merger.

Now, assume that CFO is performing sensitivity analysis and alters the assumed perpetual

growth rate to

0 %,

and the assumed discount rate to

20 % .

What will be the NPV of the cost

savings? Its IRR? Please show your work.

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