Jeffs Powerwash Inc. which operates in Texas, is considering acquiring Franks Superior Carworks chain of car washes in Maryland. The expected net cash flows from the acquisition for the first 3 years of the postmerger period follow. After 3 years, the net cash flows are expected to grow at a constant rate of 4 percent per year. If the appropriate discount rate is 10 percent, what is the most Jeffs Power- wash should pay for Franks Superior Carworks?

Year 1 Year 2 Year 3

Net cash flows $550,000 $650,000 $750,000