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  3. 4. buyer is thinking of buying x corp for 15m. its

4. Buyer is thinking of buying X Corp for 15m. Its...

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Accounting

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4. Buyer is thinking of buying X Corp for 15m. Its balance sheet is as follows: ( points FMV Basis Accounts receivable 2m 2m Inventory 3m 3m Machinery 10m 4m There are no liabilities and the company has a loss carryforward of 4m. You estimate that the company will have enough income to use the loss carryforward the year after acquisition Assume your after-tax discount rate is 10%. Also assume that the machinery is being written off over 3 years. The tax rate is 30%. A) Would Buyer rather acquire stock or assets from a tax standpoint? Explain

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