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

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Fly-by-Night Couriers is analyzing the possible acquisition ofFlash-in-the-Pan Restaurants. Neither firm has any debt. Theforecasts by Fly-by-Night show that the purchase would increasetotal annual after-tax cash flows by $600,000 indefinitely. Thecurrent market value of Flash-in-the-Pan is $10 million. Thecurrent market value of Fly-by-Night is $35 million. Theappropriate discount rate for any change in cash flows from themerger is 8 percent.
What is the total synergy gain from this merger? A.$7,500,000
What is the most that Fly-by-Night would be willing to pay forFlash-in-the-Pan (the value of a target firm to the acquiringfirm)? $17,500,000
Fly-by-Night is trying to decidewhether it should offer 25 percent of its stock or $15 million incash for Flash-in-the-Pan.
What is the NPV to Flash-in-the-Pan of each alternative? A.Cash Aquisition = $5,000,000, Stock Aquisition = $3,125,000
What is the NPV to Fly-by-Night of each alternative? A. CashAquisition = $2,500,000, Stock Aquisition = $4,375,000
Which of these alternative will Fly-by-Night prefer? A. StockAquisition
These are the answers but I just need to know how to get them,like step by step solution. Thank you!

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Fly-by-Night Couriers is analyzing the possible acquisition ofFlash-in-the-Pan Restaurants. Neither firm has any debt. Theforecasts by Fly-by-Night show that the purchase would increasetotal annual after-tax cash flows by $600,000 indefinitely. Thecurrent market value of Flash-in-the-Pan is $10 million. Thecurrent market value of Fly-by-Night is $35 million. Theappropriate discount rate for any change in cash flows from themerger is 8 percent.What is the total synergy gain from this merger? A.$7,500,000What is the most that Fly-by-Night would be willing to pay forFlash-in-the-Pan (the value of a target firm to the acquiringfirm)? $17,500,000Fly-by-Night is trying to decidewhether it should offer 25 percent of its stock or $15 million incash for Flash-in-the-Pan.What is the NPV to Flash-in-the-Pan of each alternative? A.Cash Aquisition = $5,000,000, Stock Aquisition = $3,125,000What is the NPV to Fly-by-Night of each alternative? A. CashAquisition = $2,500,000, Stock Aquisition = $4,375,000Which of these alternative will Fly-by-Night prefer? A. StockAquisitionThese are the answers but I just need to know how to get them,like step by step solution. Thank you!