Find the net present value of the acquisition

Assignment Help Financial Accounting
Reference no: EM132989356

Question - Cautionary? Tales, Inc., is considering the acquisition of Danger Corp. at its asking price of ?$170,000. Cautionary would immediately sell some of? Danger's assets for ?$17,000 if it makes the acquisition. Danger has a cash balance of ?$1,700 at the time of the acquisition. If Cautionary believes it can generate? after-tax cash inflows of ?$22,000 per year for the next 8 years from the Danger? acquisition, should the firm make the? acquisition? Base your recommendation on the net present value of the outlay using? Cautionary's 10?% cost of capital.

Find the net present value of the acquisition?

Based on the NPV?, should Cautionary make the? acquisition?

Reference no: EM132989356

Questions Cloud

What are the main concepts in this book : For your final assessment of learning in this course you are to read a book on managing quality and review it. Note, you may not review your assigned textbook.
What are your short- and long-term professional goals : Post your thoughts about your future career goals, your interest in moving into leadership or management positions, and the benefits and challenges
Research the risks posed upon the great barrier reef : i. Research the risks posed upon The Great Barrier Reef (show at least 6 URL's and 2 definitive print publications)
Different data algorithms : When using different data algorithms, why is it fundamentally important to understand why they are being used?
Find the net present value of the acquisition : Cautionary? Tales, Inc., is considering the acquisition of Danger Corp. at its asking price of ?$170,000. Find the net present value of the acquisition
Describe maharishi bow and arrow analogy : Describe Maharishi's bow and arrow analogy and the principle it illustrates
Google drive help organizations make decisions : How do data sharing tools such as Google drive help organizations make decisions? Usage of dashboards help by?
Explain how personal definition of leadership has changed : How your personal definition of leadership has changed or expanded since you began this course. Explain at least one significant idea or experience
Relationship between data redundancy and normalization : Discuss the relationship between data redundancy and normalization. What are the consequences if databases are not normalized?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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