Vogel co June 2014

Also in the question they mention that the funds raised from disposal of department C will be used to pay off tori's other NCL and CL, so why do we add those funds for finding the maximum premium? wont the funds be 0

Because the question says that Department A (which is being taken over) accounts for 50% of Tori's PBDIT and pretax profit.

The funds of $4.81 is the cash generated from selling the assets of Department C less the amount paid out to pay off other non-current and current liabilities (and the cost of closure).

Thank you!!

You are welcome :-)