hard · Principles of Finance time-value-of-money
A firm projects that a merger will generate $100M in annual pre-tax synergies starting in year 3.
If the firm applies a 10x EBITDA multiple to these synergies and faces $150M in one-time integration costs, what is the approximate NPV of the synergies at the time of the deal?
- $1,150M
- $700M
- $1,000M
- $850M
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