Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $1.4 million. Medical Labs...

Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $1.4 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 as an approximate answer, but calculate your final answer using the formula and financial calculator methods. Years 1–5 6–15 16–25 Cash inflow (aftertax) $130,000 $150,000 $190,000 Synergistic benefits (aftertax) 18,000 28,000 48,000 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. Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your final answer to 2 decimal places.) b. Should the merger be undertaken? Yes No

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