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You own a wholesale plumbing supply store. The store currently generates revenues of $ 1 . 0 1 million per year. Next year, revenues will
You own a wholesale plumbing supply store. The store currently generates revenues of $ million per year. Next year, revenues will either decrease by or increase by with equal probability, and then stay at that level as long as you operate the store. You own the store outright. Other costs run $ per year. There are no costs to shutting down; in that case you can always sell the store for $ What is the business worth today if the cost of capital is fixed at Hint: Make sure to round all intermediate calculations to at least four decimal places.
What is the business worth today if the cost of capital is fixed at
Today the business is worth $Round to the nearest dollar.
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