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CSePub Home Book Store Instructors Independent Authors About An estor can purchase a sm al business today for S 09 000 The investr plans holing the business three years, and wats a180 % annual return on his investment He feels he can sel the business for $381,800 00 in three years In addition, he also believes he can create an annual cash flow of $39,300 00 over the nexd three years from operating the business What is the value today of the expected cash tows trom this investment? (This is the net value, so include the cost at year 0) Answer Format: Currency: Round to: 2 decimal places Enter Answer Here Subri Answer Prev Problem llProblens Net Problem Contact Us Privacy Policy Tems Copyright 2019 Conley Seth Pubishing All Right reserved
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Answer #1

Value today of the expected cash flow = 381,800/(1+18%)3 + 39,300/(1+18%)3 + 39,300/(1+18%)2​​ + 39,300/(1+18%)1 - 300,900 = 16,924.19

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