When the firm is valued without taking synergies, the total value of Air Thread connections should be computed by the sum of firm value as a going concern and value of investment affiliates. This is the same as the present value of ATC we calculated before. So the cost reductions, size effects and competitor reductions remain unchanged. The acquisitions generated synergies which including: operating synergies and financial synergies.
The estimation of the value of synergies is on the basis of two sources – reduction in backhaul costs as well as additional revenue generated by new wireless subscribers. In order to gain accuracy in the calculation of synergies, affect measurements, the discounted cash flow method (DCF Method) prefers to use. The Discounted cash flow method is based on the theory that the value of a company is the sum of future free cash flows discounted at the weighted average cost of capital. Based on the information showed in the Excel, the additional cash flow costs are saved 13.4 million, while the annual business revenue has increased by 704 million at end of 2012 and the value of company with synergy has increased from 7578.2 to 15993.3million. Therefore, based on these assumptions, the acquisition of
ATC is a beneficial project for ACC. Acquiring ATC can be beneficial in terms of operating and solving financial problems .ACC saved the operating