A group of bankers is evaluating a failing toy business named 'The Toy Brick' that is going to shut down next year, and the bankers would like to determine if they should buy it this year.

The bankers are trying to determine the value of the business, so they can know what they should pay for it.

'The Toy Brick' Company will make a one time liquidation payment of $77,894 in one year to the owner and then it will shut down.

Determine the simple valuation for what amount of money should the bankers offer for the business in order to acquire the one time payment next year?

Assume that banks are offering a 1.24% rate of return on deposits.

a.

~$76,939

b.

None of these

c.

~$62,817

d.

~$965

e.

~$96,588