Question: Consider the following data for Company Average Inc. Please note Average Inc is up for sale. Annual net profit: $640,000 BV of net assets: $4,800,000

Consider the following data for Company Average Inc. Please note Average Inc is up for sale. Annual net profit: $640,000 BV of net assets: $4,800,000 FV of assets: $ 5,000,000 Normal industry average on Net assets: 15% Mr Wise is willing to buy Average Inc. and pay a goodwill amount equal to above-average earnings for 5 years. What price should Mr Wise quote? (please show calculations)

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