Mary Barth is thinking about starting a car rental business. She plans to buy four cars now and to then add a fifth car at the end of the second year. Each car will cost 20,000. Mary has carefully evaluated the local market for rental cars and believes that each car will generate 5,000 of net operating cash flow each year. At the end of five years, she believes the cars can be sold for 30,000 in total.

Additional information:

• Barth will put 80,000 cash into the business. This amount represents beginning equity.
• The company will pay out all excess cash as dividends each year. The cash needed to buy the car in Year 2 will come from operating cash flows that year. No new investment will be required.
• Car depreciation is 3,043.48 per car per year, which results in the cars having a book value of 30,000, the expected salvage value, at the end of Year 5.
• The appropriate discount rate is 10%.

Required How much is the business worth? Use both dividend discount and residual income valuation models. Fill the table