1. Using the ROI valuation technique. Calculate the purchase price for a business with a $250 000 annual profit and a level of risk that commands a 15 per cent return on investment. What would be the purchase price for the same business if the anticipated ROI was 10 per cent.

2. Altering earnings based valuation factors. Repeat the two calculations in exercise 1 above, but with a firm whose net profit is only $30,000.