The owner of a small business expects to generate a profit of $100,000 per year for 2
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Question:
The owner of a small business expects to generate a profit of $100,000 per year for 2 years and is going to sell the firm at the end of the second year for $800,000. The owner believes that the appropriate discount rate for the firm is 10% per year. What is the value of the small business based on the assumptions that the owner has set?
Solve the activity and show all the computations. In the end, summarize it by giving the numerical solution only. Please it should not have any exponent formulas. I think this is just a simple computation.
Related Book For
Accounting Texts and Cases
ISBN: 978-1259097126
13th edition
Authors: Robert Anthony, David Hawkins, Kenneth Merchant
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