J & J Enterprises is considering a cash acquisition of Patterson Steel Company for $4,400,000. Patterson...

	Years
	1–5		6–15		16–20
Cash inflow (aftertax)	$	480,000	$	640,000	$	840,000
Synergistic benefits (aftertax)		44,000		64,000		74,000

The cost of capital for the acquiring firm is 11 percent.

a. Compute the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Should the merger be undertaken?

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jeff jeffy answered 1 year ago

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