In September $2008,$ the IRS changed tax laws to allow banks to utilize the tax

loss carryforwards of banks they acquire to shield up to $100\%$ of their future

income from taxes $($prior law restricted the ability of acquirers to use

these credits$).$ Suppose Fargo Bank acquired Covia Bank and with it acquired

$$74$ billion in tax loss carryforwards. If Fargo Bank was expected to generate

taxable income of $$10$ billion per year in the future, and its tax rate was $30\%,$

what was the present value of these acquired tax loss carryforwards given a

cost of capital of $8\%?$ How would the present value change under current law

which restricts the amount of the deduction to $80\%$ of pre$-$tax income?