In​ 2012, the Campbell Soup Company acquired Bolthouse Farms for​ $1.55 billion. This acquisition increased the level of vertical integration in​ Campbell, as Bolthouse Farms owned and operated extensive farming operations where it produced many food items used in​ Campbell's products.   Suppose that the value of produce provided by these farms after the acquisition would be ​$75 million per year for Campbell and​ that, in​ addition, Campbell could save ​$20 million per year in costs it would otherwise spend in searching for and negotiating over equivalent produce. ​ However, the transaction cost of the acquisition​ (lawyers' fees,​ re-locating some production​ facilities, paying severance to unnecessary​ employees, etc.) required a​ one-time payment of $45 million.     Assume that Campbell receives the produce related benefits in perpetuity. If the interest rate used to discount future earnings is 5​%, what is the present value of net benefits to​ Campbell?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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In​ 2012, the Campbell Soup Company acquired Bolthouse Farms for​ $1.55 billion. This acquisition increased the level of vertical integration in​ Campbell, as Bolthouse Farms owned and operated extensive farming operations where it produced many food items used in​ Campbell's products.  
Suppose that the value of produce provided by these farms after the acquisition would be
​$75 million per year for Campbell and​ that, in​ addition, Campbell could save ​$20 million per year in costs it would otherwise spend in searching for and negotiating over equivalent produce. ​ However, the transaction cost of the acquisition​ (lawyers' fees,​ re-locating some production​ facilities, paying severance to unnecessary​ employees, etc.) required a​ one-time payment of $45 million.  
 
Assume that Campbell receives the produce related benefits in perpetuity. If the interest rate used to discount future earnings is 5​%, what is the present value of net benefits to​ Campbell?
 
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