Joe just inherited the family business, and having no desire to run the family business, he has decided to sell it to an entrepreneur. In exchange for the family business, Joe has been offered an immediate payment of $50000. Joe will also receive payments of $50000 in one year, $50000 in two years, and $100000 in three years. The current market rate of interest for Joe is 5%.

In terms of present value (PV), how much will Joe receive for selling the family business?

Answer rating: 100% (QA)

year Particulars Cashflows PV Factor 5 PV of Cash flows ... View the full answer