ABC Is Considering Acquiring XYZ and Has Compiled This Information

question 72

Multiple Choice

ABC is considering acquiring XYZ and has compiled this information on XYZ: The applicable tax rate is 21 percent and the terminal value of XYZ as of Year 3 is $2.5 million.What is the NPV of this acquisition if the discount rate is 7.1 percent and the acquisition cost is $2.25 million?

• A)$538,316
• B)$509,482
• C)$499,003
• D)$506,048
• E)$496,399

---

Definitions:

Law Enforcement Officers

Individuals empowered by the state to enforce laws, protect property and citizens, and limit civil disorder.

Central Intelligence Agency (CIA)

A civilian foreign intelligence service of the federal government of the United States, tasked with gathering, processing, and analyzing national security information.

Federal Bureau of Investigation (FBI)

A federal agency of the United States responsible for investigating and enforcing the national laws.

National Security Agency

A U.S. government agency responsible for global monitoring, collection, and processing of information and data for foreign intelligence and counterintelligence purposes.