Company a wants to expand it is considering a purchase of

Reference no: EM13600291

Company A wants to expand. It is considering a purchase of company B for 3 million dollars. Company B has a $700,000 tax loss carry forward that could be used immediately by company A. , which is paying taxes at 30%. Company B will provide 420,000 per year in cash flow (after tax income plus depreciation) for the next 20 years. If company A has a cost of capital at 13%, should the merger be undertaken?

Reference no: EM13600291

Questions Cloud

Oregon equipment company wants to develop a new : oregon equipment company wants to develop a new log-splitting machine for rural homeowners. market research has

At december 31 2007 angie brandt corp has assets of : at december 31 2007 angie brandt corp. has assets of 10000000 liabilities of 6000000 common stock of 2000000

The company provided 20000 of services for customers on : the company provided 20000 of services for customers on account the company received 20000 in cash from customers who

What is the amount of total cost allowed if the 15 percent : redback networks inc. a subsidiary of ericsson provides networking services and related systems for 75 of the worlds

Company a wants to expand it is considering a purchase of : company a wants to expand. it is considering a purchase of company b for 3 million dollars. company b has a 700000 tax

Perine company has 2000 pounds of raw materials in its : perine company has 2000 pounds of raw materials in its december 31 2013 ending inventory. required productionf for

The debt to total assets ratio is one measure used to : the debt to total assets ratio is one measure used to assess the long term debt paying ability of the firm. when

How much indirect cost would be allocated to each producing : nevada company has three producing departments p1 p2 and p3 for which direct department costs are accumulated. in

Ernst company purchased equipment that cost 750000 on : ernst company purchased equipment that cost 750000 on january 12010. the entire cost was recorded as an expense. the

User Account

All Pages