Question
You are offered a business that has expected after-tax cash flows of $100,000 a year for the next 10 years, the time period for your
You are offered a business that has expected after-tax cash flows of $100,000 a year for the next 10 years, the time period for your investment horizon. You require a 14.95% return on similar risk investments. The owner will sell the business at a special price of $502,800 right now. You ____ consider this business because ____.
would; it earns enough to meet your required rate return
would; you want to own a business
would; it is ok although it does not make much profit
would not; the business does not make any profit
would not; the asking price would not earn your required rate of return
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