Marty is considering buying Apex Enterprises and has come to you for advice. Marty believes that if he buys this business it will have cash earnings as follows:

$1.2mm the first year

$1.4mm the second year

$1.6mm the third year

$2mm per year thereafter forever

Marty has talked to a bank and thinks that he can borrow half the purchase price at 5% and get the orher half from investors who will demand a 15% return.

Due to some tax losses from the past, you can assume that Apex will never have to pay taxes again.

How much is Apex worth?