What is the approximate net present value of acquistion

Assignment Help Financial Management

Reference no: EM131082893

Marketing Concepts Inc. is considering the aquistion of Management Theories Inc. at a cash price of $1.5 million. Management Thories, Inc. has a short term liabilites of $500,000. As a result of aquiring Management Theories, Inc., Marketing Concepts Inc. would aquire the copyrights to a national best-seller which would provide an estimated cash flow of $300,000. The firm has a cost of capital of 20 percent.

1. What is the approximate net present value of this acquistion?

2. How would this amount be used in a purchase for cash? Purchase for stock?

Reference no: EM131082893

Questions Cloud

What amount will the firm be able to depreciate : Underwater swimwear recently purchased a new machine for $350,000. It cost 20,000 to ship the machine to underwater's facility, and it cost another $50,000 to get it installed. Purchase of the new machine will require Underwater to increase its worki..

Life insurance policy from the nickel life insurance : Your client, Ned Bovine, purchased a $2 million life insurance policy from the Nickel Life InsuranceCo. (NLIC) of Dime Box, Texas. Ned's wife is the beneficiary of the policy. The policy was purchased10 years ago when Nickel Life Insurance was a m..

Professional event managers with remarkable portfolios : Students are invited to prepare a material based on the following: you are professional event managers with remarkable portfolios in this field. You are preparing a risk management plan for a prestigious event which you are organizing (feel free t..

Strategic management of health care organizations : Complete a detailed case study analysis of the given case, using the process described in the following chapter of your course textbook Strategic Management of Health Care Organizations:

What is the approximate net present value of acquistion : Marketing Concepts Inc. is considering the aquistion of Management Theories Inc. at a cash price of $1.5 million. Management Thories, Inc. has a short term liabilites of $500,000. What is the approximate net present value of this acquistion? How woul..

Control measures that organizations can implement : Propose at least three control measures that organizations can implement to mitigate the potential issues associated policy development and implementation.

The coca-cola growth rate : b) For the year 2000, Coca-Cola Company, recorded net sales of $7,368 million. For 2010, Coca-Cola recorded net sales of $11,245 million. Over the ten-year period from the end of fiscal year 2000 to the end of 2010, What is the Coca-Cola's growth ..

Technology to maintain high switching costs : Give an example of a company whose switching costs are too high, effectively keeping its customer captive. How is this company using technology to maintain high switching costs?

Calculate payback period-profitability index-internal rate : Bethesda Mining is a midsized coal mining company with 20 mines located in Ohio, Pennsylvania, West Virginia, and Kentucky. The company operates deep mines as well as strip mines. Calculate the payback period, profitability index, next present value,..

User Account

All Pages