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Berkshire Hathaway is considering the purchase of A.B.Bearcat. The company, A.B.Bearcat, is expected to generate cash flows of $6,382, $8,163, $5,742, and $6,021 over the
Berkshire Hathaway is considering the purchase of A.B.Bearcat. The company, A.B.Bearcat, is expected to generate cash flows of $6,382, $8,163, $5,742, and $6,021 over the next four years, respectively. After that time, it is believed that the company will be worthless. Berkshire Hathaway has determined that a rate of return of 11.12 percent is applicable to this potential purchase. What is the most that Berkshire Hathaway would willing to pay today to buy A.B.Bearcat? 400TU
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