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Compute what is the value of the firm

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Over the next three years, a firm is expected to earn economic profit of $700,000 in the first year, $800,000 in the second year, and $500,000 in the third year. After the end of the third year, the firm goes out of business.

Question a. If the risk-adjusted discount rate is 16 percent for each of the next three years, what is the value of the firm or how much can be sold today for a price of $

Reference no: EM132598460

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