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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › M&A – example 4 – Nairobi plc
Hi John,
May i ask the discount total cash flow for year 1 to 5 (answer: 35, 42,47,52,207), how did you calculate for it?
Thanks
I added the two cash flows together (and added 7 per year to each – the after tax synergy benefit) and then multiplied each flow by the relevant discount factor at 11% from the tables.
thank for the respond sir =)
But may i ask how u get the 7?
The question says that the synergy benefit is 10 p.a. before tax, and the tax rate is given as 30%.
10 – (30% x 10) = 7.