(b) The estimates are based upon unrealistic assumptions and are subject to a considerable margin of error. Possible limitationsinclude:(i) Sales, operating costs, replacement investments, and dividends are unlikely to increase by the same amount.(ii) Forecasts of future growth rates may not be accurate. Paxis is unlikely to have access to enough internal informationabout the activities of Wragger to make accurate projections.(iii) The expected reduction in operating costs might not be achieved.(iv) The estimates are based upon present values to infinity of expected free cash flows. A shorter time horizon might bemore realistic.(v) The cost of capital for the combined company could differ from that estimated, depending how the market evaluates therisk of the combined entity.(vi) The analysis is based upon the assumption that the initial offer price is accepted.(vii) There is no information about the fees and other costs associated with the proposed acquisition. In many cases theseare substantial, and must be included in the analysis.(viii) The post acquisition integration of organisations often involves unforeseen costs which would reduce the benefit of anypotential synergy.