PEARSON CONNECTION INC IS CONCERDING THE acquisition of Jones & bartlett inc(J&B) for $1.5 million in cash J&B has short term libilities of $500,000. As a result of acquiring J&B Pearson connections inc would acquire the copyrights to a widely used virtual textbook which would provide $300,000 in estimated cash flow per year for each of the next five years. the pearson has a cost of capital of 20%
1) Determine the approximate net present value of this acquisition.
2) how would this amount be used In a purchase for cash? Purchase for stock?