Ask Question
23 September, 02:24

you are thinking of buying a craft emporium. It is expected to generate cash flows of Rs. 30,000 per year in years 1 through 5, and Rs. 40,000 per year in years 6 through 10. If the appropriate discount rate is 8%, what amount are you willing to pay for the emporium?

+4
Answers (1)
  1. 23 September, 03:56
    0
    The amount are i am willing to pay for the emporium is $228,476

    Explanation:

    PV = 30000/1.08 + (30000/1.08^2) + (30000/1.08^3) + ((30000/1.08^4) + ((30000/1.08^5) + (40000/1.08^6) + (40000/1.08^7) + ((40000/1.08^8) + ((40000/1.08^9) + ((40000/1.08^10)

    PV = 27,778 + 25,720 + 23,815 + 22,051 + 20,417 + 25,207 + 23,340 + 21,611 + 20,010 + 18,528

    = $228,476
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “you are thinking of buying a craft emporium. It is expected to generate cash flows of Rs. 30,000 per year in years 1 through 5, and Rs. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers