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Thiago just inherited the family business, and, having no desire to run the family business, he...

Thiago just inherited the family business, and, having no desire to run the family business, he has decided to sell it to an entrepreneur. In exchange for the family business, Thiago has been offered an immediate payment of $100,000. Thiago will also receive payments of $50,000 in one year, $50,000 in two years, and $75,000 in three years. The current market rate of interest for Thiago is 6.0%. How much will Thiago receive for selling the family business?

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Answer #1

value of bussiness is sum of discounted cash flows discounted at 6%

value is 254641.08

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