The management team of Gwapo Co. is deciding to acquire Beauty Co., an entity that sells a product that compliments its own product. The management of Beauty Co. demands a price of P18,000,000 for it to agree with the acquisition by Gwapo Co. Relevant data gathered for annual operations are as follows: Gwapo Co. Beauty Co. Combined Average Net Income 3,500,000 2,500,000 6,500,000 Depreciation Expense 150,000 350,000 250,000 12% WACC 15% 12.50%

The management team of Gwapo Co. is deciding to acquire Beauty Co., an entity that sells a product that compliments its own product. The management of Beauty Co. demands a price of P18,000,000 for it to agree with the acquisition by Gwapo Co. Relevant data gathered for annual operations are as follows: Gwapo Co. Beauty Co. Combined Average Net Income 3,500,000 2,500,000 6,500,000 Depreciation Expense 150,000 350,000 250,000 12% WACC 15% 12.50%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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