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After conducting a viability study, Spring Clean Chemicals is considering acquiring Daily Chemicals for $5,000,000...

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Accounting

After conducting a viability study, Spring Clean Chemicals is considering acquiring Daily Chemicals for $5,000,000 cash price. Daily Chemicals has short-term liabilities of $2379881 that Spring Clean Chemicals would have to pay immediately. As a result of the acquisition, Spring Clean Chemicals would acquire rights to Daily Chemical's patent which would increase its cash inflows by $1668969 per year for the next 7 years. The cost of capital for the acquisition is 10.8%. Calculate the net present value of the merger.

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