Roxanne invested $700,000 in a new business 4 years ago. The business was expected to bring in $8,000 each month for the next 34 years (in excess of all costs). The annual cost of capital (or interest rate) for this type of business was 10% with monthly compounding. What is the value of the business today? 

HINT The question asks you for the value of the business TODAY. So the 4 years that have passed does not matter. Take the rest 30 years into account to calculate the value.

Answer rating: 100% (QA)

To calculate the value of the business today we can us... View the full answer