Question

What is the present value of a firm with a five-year life span that earns the following stream of expected profit? (Treat all profits as being received at year-end.) Use a risk-adjusted discount rate of 12 percent.
Year Expected profit
1 ............ $10,000
2 ............ 20,000
3 ............ 50,000
4 ............ 75,000
5 ............ 50,000



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  • CreatedNovember 18, 2014
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