Marko, Inc. is considering acquiring ABC Co. Marko believes ABC Co. could generate cash flows of $5,200, $10,200, and $16,400, respectively, over the next three years. After that time, they think the business will be worthless. Marko determined that a 14 percent rate of return applies to this potential purchase. How much is Marko willing to pay to buy ABC Co. today?

Answer rating: 100% (QA)

To calculate the present value of the cash flows and determine how much Marko is willi... View the full answer