so I was checking out how to solve this question and I saw the answers, but I don't understand the answer very well cause the format is all wrong and I hope you might be able to provide me some insights to it? it would be fantastic thanks

Suppose that your firm is considering divesting (i.e., selling) one of its product

lines. You have been approached by a prospective buyer that is willing to pay as

much as 25 million for it. The product line is expected to generate a cash flow of

2 million during the next year of operations. Thereafter, annual cash flows are

expected to grow at a rate of 3% in perpetuity. The risk of the product line is

comparable to that of the overall stock market, whose annual rate of return is

estimated to be 10%. On the other hand, risk-free investment opportunities

currently yield a 2% annual rate of return. Should you accept the offer of the

prospective buyer?