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CAPITAL BUDGETING ANALYSIS The Stanley Stationery Shoppe wants to acquire The Carlson Card Gallery for $400,000. Stanley expects the merger to provide incremental earnings of about $64,000 a year for 10 years. Ken Stanley has calculated the marginal cost of capital for this investment to be 10%. Conduct a capital budgeting analysis for Stanley to determine whether he should purchase The Carlson Card Gallery.

BuyFind

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781285867977
BuyFind

Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
Publisher: Cengage Learning
ISBN: 9781285867977

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Chapter
Section
Chapter 21, Problem 5P
Textbook Problem

CAPITAL BUDGETING ANALYSIS The Stanley Stationery Shoppe wants to acquire The Carlson Card Gallery for $400,000. Stanley expects the merger to provide incremental earnings of about $64,000 a year for 10 years. Ken Stanley has calculated the marginal cost of capital for this investment to be 10%. Conduct a capital budgeting analysis for Stanley to determine whether he should purchase The Carlson Card Gallery.

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