Calculate the net present value of the merger-abc ltd

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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: EM132689396

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