1 You want to start a business that you believe can produce cash flows of $44,000, $61,000, and $80,000 at the end of each of the next three years, respectively. At the end of three years you think you can sell the business for $200,000. At a discount rate of 9.7 percent, what is this business worth today? a $302,897 b $291,636 c $350,957 d $151,397
1 You want to start a business that you believe can produce cash flows of $44,000, $61,000, and $80,000 at the end of each of the next three years, respectively. At the end of three years you think you can sell the business for $200,000. At a discount rate of 9.7 percent, what is this business worth today? a $302,897 b $291,636 c $350,957 d $151,397
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:1 You want to start a business that you believe can produce cash flows of $44,000, $61,000,
and $80,000 at the end of each of the next three years, respectively. At the end of three years
you think you can sell the business for $200,000. At a discount rate of 9.7 percent, what is this
business worth today?
a $302,897
b $291,636
c $350,957
d $151,397
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