Compute value of the store

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Reference no: EM1362608

You are trying to assess the value of a small retail store that is up for sale. The store generated a cash flow to it owner of $100,000 in the most profitable year of operation and is expected to have growth of about 5% a year in perpetuity.

if the rate of return required on this store is 10%, what would your assessment be of the value of the store?

What would the growth rate need to be to justify a price of 2.5 million for this store

Reference no: EM1362608

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