Reference no: EM131976898
Question: Fly-By-Night Couriers is analyzing the possible acquisition of Flash-in-the-Pan Restaurants. Neither firm has debt. The forecasts of Fly-By-Night show that the purchase would increase its annual aftertax cash flow by $320,000 indefinitely. The current market value of Flash-in-the-Pan is $9 million. The current market value of Fly-By-Night is $22 million. The appropriate discount rate for the incremental cash flows is 8 percent. Fly-By-Night is trying to decide whether it would offer 35 percent of its stock or $12 million in cash to Flash-in-the-Pan.
a. What is the synergy from the merger? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Synergy value $
b. What is the value of Flash-in-the-Pan to Fly-By-Night? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Value $
c. What is the cost to Fly-By-Night of each alternative? (Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Cost of cash $ Cost of stock $
d. What is the NPV to Fly-By-Night of each alternative? (Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) NPV of cash $ NPV of stock $
e. What alternative should Fly-By-Night use? Cash offer Stock offer
|
Volume will the solution begin to show solid crystals
: 350 mL of a 1.0 M CuSO4 solution is left on the counter and allowed to evaporate. CuSO4's saturation solubility point is 1.4 M. At what volume will the solution
|
|
Compute the amount of medical expenses that will be included
: Compute the amount of medical expenses that will be included with Simpson's itemized deductions after any applicable limitations.
|
|
Considering new three-year expansion project
: Keiper, Inc. is considering new three-year expansion project that require initial fixed asset investment of $2.73 million.what is project’s year 0 net cash flow
|
|
What is the volume o2 at stp
: O2 is generated into a 250mL beaker by water displacement at a pressure of 730 torr and a temperature of 25C. What is the volume O2 at STP?
|
|
What is the synergy from the merger
: What is the synergy from the merger? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567).
|
|
Determine both basic and diluted earnings per share
: The Simon Corporation issued 10-year, $5,000,000 par, 7% callable convertible subordinated debentures. Determine both basic and diluted earnings per share.
|
|
Excess hydrogen gas at stp
: 1. How many liters of water can be made from 55g of O2 and excess hydrogen gas at STP?
|
|
Find the cash flow from assets in the last year of project
: A fixed asset for a 3-year project costs $1, 800 and is classified as a 3-year asset under MACRS; its salvage value will be $300 at the end of the project.
|
|
Anchors are ubiquitous in financial markets
: Anchors are ubiquitous in financial markets. What is the difference in the present value if you receive these payments at beginning of each year
|