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A company is evaluating an acquisition target. The target has the following projected free cash...

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Accounting

A company is evaluating an acquisition target. The target has the following projected free cash flows:
YearCash Flow
1$1,200,000
2$1,500,000
3$1,800,000
4$2,000,000
5$2,200,000
The acquisition cost is $6,000,000.
Requirements:
1.Calculate the NPV of the acquisition using a discount rate of 8%.
2.Determine the IRR of the acquisition.
3.Assess the payback period for the acquisition.
4.Advise on whether the acquisition should proceed based on the calculated metrics.

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