Duedion 24 A firm will have constant profits of $210,000 per year for the next four years and the interest rate is six percent. Not vel Assuming these profits are realized at the end of each year, what is the present value these future profits? Question 25 Titanic Lid is in the lucrative field of underwater cruise liners. Over the next three years, Titanic Lid, is expected to earn economic profit of $500 0OD in the first year, $1 400 000 in the second year, and $900 000 in the third year than it will sink. This controversial new field is highly volatile with a risk proman of 16% The latest discount rate published by the Central Bank is 5%. How much would you pay for this firm? Quecor 26 What is the present value of a firm with a four year be span that earns the following stream of expected profit? Use a risk-adjusted discount rate of 10 percent. Treat all prghts as being received at year-end Year 1 - 520 000 Year 2 - $40 000 Year 1 -$70 000 Your 4 - 590 000