Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $2.7 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 |
6-15 |
16-25 |
| Cash inflow (aftertax) |
$260,000 |
$280,000 |
$320,000 |
| Synergistic benefits (aftertax) |
31,000 |
41,000 |
61,000 |
|
The cost of capital for the acquiring firm is 10 percent.
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 "tiny_mce_markerquot; sign in your response.)