You founded a brick making company 10 year ago and have operated it since then. You believe it is now time to sell the company and spend your time in Saint Marie beaches. A potential buyer, without necessary capital to make a single payment, has proposed a payment structure to acquire the business. According to terms of the proposal, the buyer would make an immediate payment of $1,200,000 and then quarterly payments starting at the end of first quarter for 24 quarters. The first quarterly payment would be $260,000 and would increase at 2 percent per quarter. What is the total value of the business now as indicated by the proposal given your required return at 12 percent compounded quarterly?

Answer rating: 100% (QA)

To calculate the total value of the business now as indicated by the proposal we need to determine t... View the full answer