In connection with plans to buy another company for NOK 3 billion, a company is preparing estimates for which cash flow

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In connection with plans to buy another company for NOK 3
billion, a company is preparing
estimates for which cash flow the acquisition will contribute when
synergies are taken into account.
The assumption made is that the cash flow will be NOK 400 million
before financial costs and
tax the first year, then 2% more, ie NOK 408 million the following
year, then another 2% more next year
etc. so that the cash flow grows by 2% from year to year. The
company counts as first
cash flow comes one year after the acquisition, the other after two
years, etc. and counts as one
infinite number of periods. The company assumes that interest on
debt related to the acquisition will amount to one
constant share of the cash flow in all periods. More specifically,
the company assumes that interest rates will
constitute 30% of cash flow in all periods. The company uses the
required return on total capital
after tax, WACC, to calculate the net present value of the planned
acquisition. WACC is estimated at
12%. The corporation tax rate is 25%. With the given assumptions,
what is the net present value of
the acquisition?