Calculate the net present value of the merger

Assignment Help Finance Basics
Reference no: EM132689367

ABC Ltd is considering the acquisition of XYZ Ltd at a cash price of $5,000,000. XYZ Ltd has short-term liabilities of $1195371 that ABC would have to pay immediately. As a result of the acquisition, ABC would acquire rights to XYZ's patent which would provide an estimated cash inflow of $1787338 per year for the next 8 years. The cost of capital for the acquisition is 10.9%. Calculate the net present value of the merger

Reference no: EM132689367

Questions Cloud

What is the additional profit contribution : What is the additional profit contribution from sales if credit standards are relaxed?
Explain goal treatment pharmacology : You must create a case and develop the following topics (MANDATORY): Labs or tests typically ordered concerning this condition, and explain them.
Think of terrorist attack : When people think of a terrorist attack, images of explosions or 9/11 flash through their minds.
ITNE2005 Develop a security Infrastructure for a Medium-Size : ITNE2005 Develop a security Infrastructure for a Medium-Size Network Assignment Help and Solution, Victoria Institute of Technology - Assessment Writing Service
Calculate the net present value of the merger : The cost of capital for the acquisition is 10.9%. Calculate the net present value of the merger
How paths of dependencies can affect the security : Discuss how having multiple levels and paths of dependencies can affect the security of an application. Also, what do you think about remediation challenges
Discussion centers around the concept of blockchain : Discussion centers around the concept of Blockchain. There is still much confusion regarding what Blockchain is and what it is not.
Global warming is systemic heating of earth water masses : Global warming is the systemic heating of the earth's water masses, atmosphere, and surface due to human activity that leads to greenhouse gas emissions
Explain the benefits of establishing solid financial acumen : Keeping abreast of the financial measures and metrics employed, Explain the benefits of establishing solid financial acumen in a company?

Reviews

Write a Review

Finance Basics Questions & Answers

  Describe the general findings from capital market research

describe the general findings from capital market research concerning the information content of accounting numbers and

  Start production of a new model

Your company produces bicycles and is about to start production of a new model.

  Interest rate in financial decisions

1. What is the correct way to annualize an interest rate in financial decisions?

  What is the value of each coupon payment

A company has issued a series of debentures which have a face value of $600 and pay a semi-annual coupon at a coupon rate of 8%. What is the value of each coupo

  In may 1988 walt disney productions sold to japanese

in may 1988 walt disney productions sold to japanese investors a 10- year stream of projected yen royalties from tokyo

  What is the inventory turnover

Big Bang Fireworks normally purchases $120,000 of inventory each day. Each item normally remains in inventory 18 days before it is sold.

  Dicuss effect of monetary policy on interest rate in economy

Use the loanable funds market to explain how unexpected contractionary monetary policy affects interest rates in the short run.

  What benefit did the venezuelan regime in power gain

What benefit did the Venezuelan regime in power gain from the repeated devaluation of the Bolivar?

  The operating power of a high-end desk top system

You have just been hired by Hewlett Packard (HP) in its capital budgeting division. Your first assignment is to determine the net cash flows and NPV of a proposed new type of portable computer similar in size to an iPhone, but which has the op..

  Terms of promoted videos in searches

Do you ever fail to come up with videos? What do you see in terms of promoted videos in these searches?

  Determining the present value of the annuity

An annuity has an interest rate of 7% and makes a quarterly payment of $2000. The annuity is to last for 5 years. What is the present value of the annuity?

  Yearly rates are 4 5 6 7 and 8 for the next five years

1.what theory most identifies with the term structure of interest rates? and why? 2.what is evidence that does not

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd