![lisamccray45](/avatars/1024.jpg)
lisamccray45
21.04.2020 •
Business
Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $6,000, $11,000, and $17,200 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a rate of return of 14 percent is applicable to this potential purchase. What is Marko willing to pay today to buy ABC Co.?
Solved
Show answers
More tips
- L Leisure and Entertainment How to Land on the Moon: Your Comprehensive Guide...
- T Travel and tourism How to Use a Compass: A Beginner s Guide...
- C Computers and Internet Porn Banner: What It Is and How to Get Rid Of It?...
- F Food and Cooking How many stages of coffee roasting are there?...
- F Food and Cooking From Latte to Espresso: Which Coffee Drink is the Most Popular on Earth?...
- F Food and Cooking Experts Name Top 5 Healthiest Teas...
- C Computers and Internet Google Search Tips and Tricks: Everything You Need to Know...
- H Health and Medicine Discover the Hidden Principles and Real Results of the Japanese Diet...
- H Health and Medicine Liver Cleansing - Rejuvenation for the Body?...
- S Style and Beauty Is Photoepilation the Solution to Unwanted Hair Forever?...
Answers on questions: Business
- B Business When a company pays employees salaries for the current period, how will the basic accounting equation be affected?...
- B Business Character of the rivalry is a measure of the intensity of competitive behavior between companies in an industry. select one: true false...
- B Business Economic factors in decision making fall under the category of a. external factors b. internal factors c. decision impacts d. consequence types...
- B Business Identify three types of business or professional organizations?...
- B Business Suppose you are interested in working in a formal workplace. what are three jobs you might like?...
- B Business Customer relationship management is used for all of the following EXECPT Can anyone help me with this question? Please and thank you.A. to target highly valued customers.B....
- H Health Which is an example of an unhealthy relationship a. abuse b. going on dates on a regular c. planning a future with him or her...
- B Biology What type of plants use a system for transporting water and food?...
- M Mathematics If aisha can earn $7,500 in 2.5 years how much money does she earn per month...
- M Mathematics Which relation is represented by the arrow diagram? {(–2, 0), (–1, 0), (0, 6), (2, 1), (3, 2)} {(–2, 0), (–1, 0), (0, 6), (2, 2), (3, 6)} {(0, –2), (0, –1), (6, 0),...
Ответ:
$ 25,336.81
Explanation:
The maximum Marko would pay today is the present values of the future cash inflows of ABC Co discounted at the required rate of return of 14% as computed below:
Years cash-flows discount factor present values
1 $6000 1/(1+14%)^1=0.87719 $ 5,263.16
2 $11,000 1/(1+14%)^2=0.76947 $ 8,464.14
3 $17,200 1/(1+14%)^3= 0.67497 $ 11,609.51
Total present values $25,336.81
From a rational investor's point of view , the maximum Marko Inc. would pay for ABC Co is $ 25,336.81 which is the present worth of cash flows realizable from the business in future
Ответ:
I hope that helped