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Problem 2 Ling Mining is considering the acquisition of Lunox Mining at a cash price of P6,000,000. The primary motivation for Ling's purchase of Lunox is for a special piece of drilling equipment that it believes will generate after-tax cash flows of P2,000,000 per year during the next 5 years. Lunox Mining has liabilities of P9,000,000 and Ling estimates that it can sell the remaining assets at P6,500,000. Ling will use a 20 percent cost of capital for evaluating the acquisition. Required: (5 points) 3. What is the net value of the special drilling equipment? Problem 3 QRST Corporation is not going well, and the shareholders have decided to liquidate the business. The corporation reported a cash of P50,000 and building valued at P800,000. They owe P500,000 to various creditors. Upon checking the realtors, they can sell the building at P1,000,000 based on current prices. As of the date, QRST Corporation has 50,000 outstanding ordinary shares with par value of P5.00 and 10,000 outstanding preference shares with par value of P10.00 and liquidation value of P15.00. Required: (5 points each) 4. How much is the liquidation value of QRST Corporation? 5. How much is the liquidation value per share of ordinary share