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Cullumber LLC recently bought a company and wants to determine the optimal time to sell it. The partner in charge of the investment has estimated
Cullumber LLC recently bought a company and wants to determine the optimal time to sell it. The partner in charge of the investment has estimated the after-tax cash flows from a sale at diffwrent times to be as follows: $700,000 if sold one year later; $1,100,00 if sold two years later; $1,300,000 if three years later; $1,400,000 if sold four years later. The opportunity cost of capital is 16.5 percent. Calculate the NPV of each choices. Also, when should Cullumber LLC sell ghe company (1,2,3, or 4 years) according to this?
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