These earnings are assumed to fall within the annual limit legally allowed for application of a tax loss carryforward resulting from the proposed acquisition.) Firmatron has a 40 percent tax rate and a cost of capital of 15 percent. The approximate maximum cash price Firmatron would be willing to pay for Health-o-Matic is
A. $4,750,000.
B. $4,500,000.
C. $4,410,000.
D. $3,750,000.
Answer:C
These earnings are assumed to fall within the annual limit legally allowed for application of a tax loss carryforward resulting from the proposed acquisition.) Firmatron has a 40 percent tax rate and a cost of capital of 15 percent. The approximate maximum cash price Firmatron would be willing to pay for Health-o-Matic is
A. $4,750,000. B. $4,500,000. C. $4,410,000. D. $3,750,000.