What is the NPV of division A? (Round to 2 decimal places) What is the...
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What is the NPV of division A? (Round to 2 decimal places)
What is the NPV of buying both divisions? (Round to 2 decimal places)
What is the IRR of buying both divisions? (Round to 2 decimal places)
A firm wants to purchase a company that has two distinct divisions. The firm would like to buy the high growth division, but the company will sell both divisions together or none at all. The firm has estimated the cash flows of owning both divisions over the next 5 years. The firm uses a 12.00% cost of capital to evaluate the decision. YEAR Division A -$150.00 $75.00 $75.00 $80.00 $80.00 $100.00 Division B -$80.00 $10.00 $10.00 $10.00 $0.00 $0.00
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