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Youare considering investing inan auto parts store.The store has a 10 yearlease, which implies that it will remain in business for the next 10years.It produced

Youare considering investing inan auto parts store.The store has a 10 yearlease, which implies that it will remain in business for the next 10years.It produced annual cashflows of $400,000 (after all expenses were deducted). Thediscount rate to value businesses with similar risk levelsis 10%.You estimate that, over the long-term, cash flows will grow at 5%per year because of inflation expectations. Based on this information, what is theestimated value of the store?

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