Neither Acquiring Firm a nor Target Firm B Has Any

question 280

Multiple Choice

Neither acquiring firm A nor target firm B has any debt. The incremental value of the proposed acquisition is estimated to be $250,000. Firm B is willing to be acquired for $30 per share in cash. What is the NPV for acquiring firm B?

• A) The NPV is negative
• B) $115,000
• C) $160,000
• D) $235,000
• E) $260,000

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