Determine the value of the business

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Reference no: EM132813516

Sally's Bar and Grill is available for purchase. Sally's earnings for the past five years were as follows:

Last year, $50,000

Two years ago, $60,000

Three years ago, $30,000

Four years ago, $40,000

Five years ago, $25,000

Determine the value of the business, using the following methods (use current bank interest rates) and both general and weighted averaging methods:

a. Capitalized earnings formula

b. Times earnings method

Reference no: EM132813516

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