You are planning to take over your brother's business. You have estimated it will give you...

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You are planning to take over your brother's business. You have estimated it will give you net cash flows of $5505 per month. You hope to sell it in 6 years for $440143. Your required return is 9.97%, how is the business worth today? (hint: There is both an annuity (the semi-annual payments) and a lump sum (the selling price). Find the present value of each and add them together. Use the same "r" and "t" for both the annuity and the lump sum.) Answer: You are planning to take over your brother's business. You have estimated it will give you net cash flows of $5505 per month. You hope to sell it in 6 years for $440143. Your required return is 9.97%, how is the business worth today? (hint: There is both an annuity (the semi-annual payments) and a lump sum (the selling price). Find the present value of each and add them together. Use the same "r" and "t" for both the annuity and the lump sum.) Answer:

Answer rating: 100% (QA)

To calculate the present value of the business we need to find the present value of the monthly cash ... View the full answer