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Acqusition problem - example

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Alpha Corporation is considering buying Beta Corporation for $2,400,000 cash. Beta Corporation has a $600,000 tax loss carryforward that could be used immediately by Alpha Corporation. Alpha Corporation pays tax at the rate of 35%. Beta Corporation will provide $300,000 per year in cash flow (in after tax income plus depreciation) for the next 20 years. If Alpha Corporation has a cost of capital of 11%, should Alpha Corporation go forward with the acquisition? (Show your work/calculations/formulas)

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Beta Corporation - Loss Carry Forward $600,000
Alpha Corporation - Tax Rate 35%
Actual Purchase ...

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