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Fly-By-Night Couriers is analyzing the possible acquisition of Flash-in-the-Pan Restaurants. Neither firm has debt. The...

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Fly-By-Night Couriers is analyzing the possible acquisition of Flash-in-the-Pan Restaurants. Neither firm has debt. The forecasts of Fly-By-Night show that the purchase would increase its annual aftertax cash flow by $310,000 indefinitely. The current market value of Flash-in-the-Pan is $7 million. The current market value of Fly-By-Night is $16 million. The appropriate discount rate for the incremental cash flows is 10 percent. Fly- By-Night is trying to decide whether it should offer 35 percent of its stock or $10 million in cash to Flash-in-the-Pan. a. What is the synergy from the merger? (Do not round Intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) Synergy value

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