Acquisition of a company


Yohai Corporation is thinking of purchasing Klein Corporation for $70,000 in cash. Yohai's current cost of capital is 16 percent. Klein's estimated overall cost of capital is anticipated to be 14 percent after the acquisition. Forecasted cash inflows from years 1 to 15 are $8,000. Should the acquisition be made?

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Finance Basics: Acquisition of a company
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