A manufacturing company is considering acquiring a smaller competitor. The target company has an expected cash flow of $2 million per year for the next five years, and the company wants to use a discount rate of 12% to evaluate the investment. The target company has a book value of $10 million, and the company expects to pay a premium of 20% over the book value for the acquisition. What is the estimated acquisition price for the target company, and should the company proceed with the acquisition?

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