Compute the net present value

Reference no: EM13262049

Boardwalk Corporation desires to expand. It is considering a cash purchase of Park Place Corporation for $2,600,000. Park Place has a $670,000 tax loss carryforward that could be used immediately by Boardwalk, which is paying taxes at the rate of 35 percent. Park Place will provide $370,000 per year in cash flow (aftertax income plus depreciation) for the next 25 years. If Boardwalk Corporation has a cost of capital of 13 percent. Use Appendix D.

Compute the net present value.

Reference no: EM13262049

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