NCCs controller believes Portables model will be obsolete within 5 years due to a myriad of consumer preference, quality control and labor issues. He recommended, unsuccessfully, to Ms. Diaz that they offer Portable to purchase the company at a 40% discount from the value in Question 1a, utilize Portables current $150 million tax loss carryforward and sell off their premerger assets at the end of 5 years. He expects earnings before taxes of the combined company to average $35 million each year during this time and that the assets could be sold for $20 million. Without the acquisition, the controller believes NCCs earnings before tax would average $30 million over the 5 years. NCC currently has no tax loss carryforwards of its own.

A. Based on the controllers estimates, what will be the combined companys tax liability and earnings after taxes each year over the next 5 years? (Show all work/calculations.) B. What would NCCs tax liability and earnings after tax be over the next 5 years without the acquisition? (Show all work/calculations.) C. Looking at the controllers recommendation, If Portable can be acquired for $43,607,288 in cash, would NCC benefit based on tax and asset sale considerations? Briefly explain. (Show all work/calculations.)

B. What would NCCs tax liability and earnings after tax be over the next 5 years without the acquisition? (Show all work/calculations.)

C. Looking at the controllers recommendation, If Portable can be acquired for $43,607,288 in cash, would NCC benefit based on tax and asset sale considerations? Briefly explain. (Show all work/calculations.)