What Is the NPV from the Merger of V and A

question 47

Multiple Choice

What is the NPV from the merger of V and A? V was worth $450 and A had a market value of $375. V acquired A for $425 because they thought the combination of VA was worth $925.

• A) $0
• B) $50
• C) $450
• D) $425

---

Definitions:

FICA-Social Security Tax

A federal tax in the United States collected from both employees and employers to fund the Social Security program.

FICA-Medicare Tax

The portion of the Federal Insurance Contributions Act tax that funds Medicare, deducted from employees' wages and also paid by employers.

Federal Income Tax

The tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Withholdings

The portion of an employee's earnings that is deducted and sent directly to the government by the employer for tax purposes.