A prospective buyer is thinking about purchasing a business. The following facts have been gathered: The liquidation value of all assets minus liabilities is $500,000; the earning power desired is 20 percent; the prospective buyer needs a yearly salary of $40,000; the average annual earnings before subtracting the entrepreneurmanager’s salary and earning power is $100,000; and any extra earning power is estimated to be of value for five years. How much should the buyer be willing to pay for the business?