Compute the net present value

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Worldwide Scientific Equipment is considering a cash acquisition of Medical Labs for $2.7 million. Medical Labs will provide the following pattern of cash inflows and synergistic benefits for the next 25 years. There is no tax loss carryforward. Use Appendix D.


   1-5   6-15 16-25
  Cash inflow (aftertax) $260,000 $280,000 $320,000   
  Synergistic benefits (aftertax) 31,000 41,000 61,000   

The cost of capital for the acquiring firm is 10 percent.


Compute the net present value. (Round "PV Factor" to 3 decimal places. Round your answer to the nearest whole number and not in millions. Negative amount should be indicated by a minus sign. Omit the "tiny_mce_markerquot; sign in your response.)


Reference no: EM13262068

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