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Accepting the merger agreement

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The President of Toys R Us is debating whether to accept a merger agreement where the companyAccs tax rate would decrease from 25% to 20%. Toys R US generates EBIT of $5 million each year and also has no growth opportunities. How much money can Toys R Us save in present value terms by accepting the merger agreement if we assume a 10% cost of capital?

Reference no: EM131015374

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Accepting the merger agreement : How much money can Toys R Us save in present value terms by accepting the merger agreement if we assume a 10% cost of capital?
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