Amount soft should be willing to pay hard

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Hard Corporation has net assets valued at $900,000 and an NOL of $450,000. On January 3 of the current year, Hard is acquired by Soft Corporation in a restructuring qualifying as a tax-free reorganization that causes an ownership shift of 80 percentage points for the Hard shareholders. Soft uses a calendar year for tax purposes. Assuming that the long-term tax-exempt rate is 5%, what is the maximum amount Soft should be willing to pay Hard for its NOL, if Soft uses a 10% discount factor (which is 6.145) for this decision?

Reference no: EM13129399

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