You are the director of mergers and acquisitions for R&R Dog Company and you just purchased...
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You are the director of mergers and acquisitions for R&R Dog Company and you just purchased the Milk Bone Dog Biscuit product line from one of your competitors. You expect to generate cash flows of $10 million, $20 million, $30 million and $40 million, respectively, in each year over the next four years.. If R&R's appropriate interest rate is 10 percent, what do you estimate is the value today of Milk Bone's cash flows?
a. $75 million (rounded)
b. $45 million (rounded)
c. $10 million (rounded)
d. $100 million (rounded)
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