Question

per your kr he kk wng1:500years Suppose he wrts a 600% amua reham to run the buurma Answer Fomat Curnrency: Round toc 2 decimall places Enter Answer Here 2 34 5 6 8 9 0

Answer 1

Initial Investment into start up = $158,955

Cash flow generated for first 15 years = $60,751

Cash flow generated for next 15 years = $129,043

Interest Rate = 6%

First we need to calculate PV of Cash Flows,

Using TVM Calculation,

$PV = \sum_{t=1}^{t} C_{t}/(1+r)^t$

PV of annual cash flow of 129,043 at start of next 15 years

PV = [FV = 0,PMT = 129043, T = 15 years, R = 6%]

PV = 1$,253,297.75

This PV is FV for first 15 year's cashflow,

PV at present day = [FV = 1253297.75, T=15,R=6,PMT = 60,751]

PV = $1,112,985.89

Value of investment today = PV - Initial Investment

Value of Business = 1112985.89 - 158,955

Value of Business = $954,030.89