The Charles Corporation desires to expand. It is considering
a cash purchase of Atlas Enterprises for $2,200,000. The Atlas Corporation has
a $630,000 tax loss carry-forward that could be used immediately by the Charles
Corporation, which is paying taxes at the rate of 30 percent. Atlas will
provide $330.000 per year in cash flow (aftertax Income plus CCA) for the next
25 years

a. If the Charles Corporation has a cost of
capital of 13 percent, compute the net present value. (Use a Financial
calculator to arrive at the answers. Negative answer should be indicated by a
minus sign. Round the final answer to the nearest whole dollar)

Net present value

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

b. Should the merger be
undertaken? $



"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"