Question: Thank you so much! intermediate Accounting Additional Present Value Problems-Unusual Patterns Unusual Patterns An economic transaction may involve a pattern of cash flows that is
intermediate Accounting Additional Present Value Problems-Unusual Patterns Unusual Patterns An economic transaction may involve a pattern of cash flows that is not fixed. There are several ways to address these pattern changes, but the easiest is to consider the time line and present value calculations in steps. The Bidding Co. to buy your small business. Your business generates a cash flow as follows you expect to receive S2,000 a year for the first three years, $3000 a year for the next 3 years and S4,000 a year for the next four years. What is the price that Bidding Co. is willing to pay for your business ifthey require a rate ofreturn of 10%? Draw the timeline: Value the first annuity Value the second annuity Value the final annuity Determine the total value ofthe business today
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