You have successfully started and operated a company for the

past 10 years. You have decided that it is time to sell your company and spend time on

the beaches of Hawaii. A potential buyer is interested in your company, but he does not

have the necessary capital to pay you a lump sum. Instead, he has offered $500,000

today and annuity payments for the balance. The first payment will be for $150,000 in

three months. The payments will increase at 2 percent per quarter and a total of 25

quarterly payments will be made. If you require an EAR of 11 percent, how much are

you being offered for your company?