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Red Rock Scooter Tours is considering acquiring a bus line tour service called Southern Ventures Vacations. The management of Red Rock Scooter Tours believes Southern
Red Rock Scooter Tours is considering acquiring a bus line tour service called Southern Ventures Vacations. The management of Red Rock Scooter Tours believes Southern Ventures can produce cash flows of $187,000, $220,000, and $245,000 over the next few years. After that time, they feel the business will be worthless. If the desired rate of return is 13.5 percent, what is the maximum Red Rock Scooter Tours should pay today to acquire Southern Ventures? $503,098 $601,226 $538,615 $545,920
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