The owner of a firm expects to make a profit of $12,000 for each of the next two years and to be able to sell the firm at the end of the second year for $30,000. The owner of the firm believes that the appropriate discount rate for the firm is 14 percent. Calculate the value of the firm.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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The owner of a firm expects to make a profit of $12,000 for each of the next two years and to be able to sell the firm at the end of the second year for $30,000. The owner of the firm believes that the appropriate discount rate for the firm is 14 percent. Calculate the value of the firm.

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