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Tapley Acquisition, Inc., is considering the purchase of Tangent Company. The acquisition would require an initial investment of $190,000, but Tapley's after-tax net cash flows would increase by $30,000 per year and remain at this new level forever. Assume a cost of capital of 15%. Should Tapley buy Tangent? A. Yes, because the NPV = $10,000. B. No, because k > IRR. C. Yes, because the NPV = $30,000. |