1. Using the discount rate=7.26%, what is the present value (PV) of the projected merger benefits in Table A of the case as of December 31, 2015? Do these projections seem reasonable? How does the PV of the pre-merger operational improvements compare to the PV of post-merger combination synergies? What is the PV of the prospective improvement in cash flow that is expected from the lowering of the effective tax rate?

Table A Projected Merger Benefits ($ millions) 2016 2017 2018 2019 2020 2021 Pre-Merger Operational Improvements Phase-in (%) Increase in EBIT 92% 17% $214 42% $529 67% $844 100% $1,260 100% $1,260 $1,159 Post-Merger Combination Synergies Phase-in (%) Increase in EBIT 0% 75% 25% $124 50% $248 100% $495 $0 $371 Projected Total Increase in CP-NS EBIT $214 $529 $968 $1,407 $1,631 $1,755 Table A Projected Merger Benefits ($ millions) 2016 2017 2018 2019 2020 2021 Pre-Merger Operational Improvements Phase-in (%) Increase in EBIT 92% 17% $214 42% $529 67% $844 100% $1,260 100% $1,260 $1,159 Post-Merger Combination Synergies Phase-in (%) Increase in EBIT 0% 75% 25% $124 50% $248 100% $495 $0 $371 Projected Total Increase in CP-NS EBIT $214 $529 $968 $1,407 $1,631 $1,755