Question
You own a wholesale plumbing supply store. The store currently generates revenues of $1.03 million per year. Next? year, revenues will either decrease by 10.4%
You own a wholesale plumbing supply store. The store currently generates revenues of $1.03 million per year. Next? year, revenues will either decrease by 10.4%
or increase by 4.6%?, with equal? probability, and then stay at that level as long as you operate the store. You own the store outright. Other costs run $890,000
per year. There are no costs to shutting? down; in that case you can always sell the store for $530,000. What is the business worth today if the cost of capital is fixed at
10.4%? ?(?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 10.4%?
?
I got answer $983694, but it tells me it is wrong. Please help. I attached images for further help.
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