Determine the present value of all future cash flows

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Jay's James Inc was just established with an investment of 5 million into equipment. Jay expects his company to generate $800000 a year for the next 10 years. Followed by $1 million a year for the following 10 years. If Jay's cost of capital is 15%. Find the market value and book value of his company.

A. What is the market value of the company? (determine the present value of all the future cash flows

B. What is the market value described as being "backward locking" and market value described as "forward-looking"?

Reference no: EM132811396

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