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In 2005, your investment company has offered to buy Ideko for $53.4 million. The projected improvements in working capital may or may not occur. If the projected improvements in working capital occur, the NPV of the investment opportunity will be approximately $26.79 million. If the projected improvements in working capital do not occur, the NPV of the investment opportunity will be approximately $16.73 million. Infer the value today of the projected improvements in working capital under the assumptions that Ideko's market share will increase by 0.55% per year and that investment, financing, and depreciation will be adjusted accordingly. Ideko's income statement and balance sheet for 2005 is shown here

In 2005, your investment company has offered to buy Ideko for $53.4 million. The projected improvements in working capital Ideko's Working Capital Requirements Working Capital Days 2005 Assets Based on: Days Accounts Receivable Sales Revenue 90 Raw Materials Raw Materials Costs 45 Finished Goods Raw Materials+Labor Costs 45 Minimum Cash Balance Sales Revenue 30 Liabilities Wages Payable Direct Labor+Admin Costs 15 Other Accounts Payable Raw Materials+Sales and Marketing 45 may or may not occur. If the projected improvements in working capital occur, the NPV of the investment opportunity will be approximately $26.79 million. If the projected improvements in working capital do not occur, the NPV of the investment opportunity will be approximately $16.73 million. Infer the value today of the projected improvements in working capital under the assumptions that Ideko's market share will increase by 0.55% per year and that investment, financing, and depreciation will be adjusted accordingly. Ideko's income statement and balance sheet for 2005 is shown here Estimated 2005 Income Statement Income Statement ($ 000) Sales 72,800 Cost of Goods Sold Raw Materials (16,400) Direct Labor Costs (17,000) Gross Profit 39,400 Sales and Marketing (11,330) Administrative (14,400) EBITDA 13,670 Depreciation (5,680) EBIT 7,990 Interest Expense (net) (80) Pretax Income 7,910 Income Tax (2,769) Net Income 5,141 And here respectively. Estimated 2005 Balance Sheet Data for Ideko Corporation Balance Sheet ($ 000) Assets Cash and Equivalents 6,243 Accounts Receivable 17,951 Inventories 6,140 Total Current Assets 30,334 Property, Plant, and Equipment 51,120 Goodwill 72,413 Total Assets 153,867 Liabilities and Stockholders' Equity Accounts Payable 4,709 Debt 102,500 Total Liabilities 107,209 Stockholders' Equity 46,658 Total Liabilities and Equity 153,867 The NPV of the savings in working capital management is $ ??? million. (Round to two decimal places.)