After the merger, the company now has the following additional data: The market value of its long-term
Fantastic news! We've Found the answer you've been seeking!
Question:
After the merger, the company now has the following additional data:
- The market value of its long-term assets is $15,000,000
- The company has a current tax rate of 25%
- The company expects its long-term assets to generate an annual cash inflow of $1,500,000 for the next 10 years.
Using the information above, answer the following questions:
Compute the net present value of the long-term assets of the merged company assuming a discount rate of 8%.
Compute the annual depreciation of the long-term assets of the merged company using the straight-line method over a useful life of 15 years, assuming no residual value.
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date: