Question
An entrepreneur estimates that his business will be worth a total of $10 million five years from now. An investor makes an offer to acquire
An entrepreneur estimates that his business will be worth a total of $10 million five years from now. An investor makes an offer to acquire 100% of the company (buy) for $6 million today. The entrepreneur knows that if the present value of the future value of the company is less than the investor's offer, he must accept the offer. Applying a discount rate of 15% to the calculations, what is the present value of the company?
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Introductory Statistics For The Behavioral Sciences
Authors: Joan Welkowitz, Barry H. Cohen, R. Brooke Lea
7th Edition
0470907762, 978-0470907764
