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AA, Inc. is considering the purchase of ZZ Co. AA believes that ZZ Co. can generate cash flows of $65,000, $98,000, and $174,000 over the
AA, Inc. is considering the purchase of ZZ Co. AA believes that ZZ Co. can generate cash flows of $65,000, $98,000, and $174,000 over the next three years, respectively. After that time, AA feels ZZ will be worthless. AA has determined that a 12% rate of return is applicable to this potential purchase. What is the fair price for ZZ Co.?
A.$247,640.12
B.$256,114.70
C.$260,010.48
D.$264,218.44
E.$275,018.24
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