Find present value of all the shops future profits

Reference no: EM1345362

Last year, a barber shop generated $100,000 in profit. Assume that the shop's profits grow at 5% per year and that cash flows are discounted at 10% per year. If profits are received at the end of each year, what is the present value of all the shop's future profits?
A. $1,500,000
B. $2,000,000
C. $2,500,000
D. $2,100,000
E. $3,000,000

Reference no: EM1345362

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