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Establish a web-service business

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BGB plans to establish a Web-service business five years from today. The business is expected to last forever once it is established. The CEO expects the business to generate $45 million in cash flows per year received at the end of each year once the business is established. If the CEO wanted to sell the rights to these cash flows to another company two years from today, what value would he place on these rights at that time, assuming an interest rate of 10% compounded annually? Please show your work.

Reference no: EM131500266

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