Marketing concepts inc is considering the aquistion of, Ask an Expert

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Marketing Concepts Inc. is considering the aquistion of Management Theories Inc. at a cash price of $1.5 million. Management Thories, Inc. has a short term liabilites of $500,000. As a result of aquiring Management Theories, Inc., Marketing Concepts Inc. would aquire the copyrights to a national best-seller which would provide an estimated cash flow of $300,000. The firm has a cost of capital of 20 percent.

1. What is the approximate net present value of this acquistion?

2. How would this amount be used in a purchase for cash? Purchase for stock?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91820839

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