How much are these future cash flows worth today

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Before finalizing the deal, Christine needs to feel confident she is not overpaying. She estimates the cash flows Smith Brothers will generate over the next 4 years and then estimates a terminal value in year 5 that represents the company's value into perpetuity. The total cash flows she calculates from the three divisions (commercial fishing, wholesale seafood sales, and retail/restaurant sales) are as follows:
$100,000, $150,000, $200,000, $300,000, $3,600,000.

Problem 1: If Christine has a cost of capital of 13 percent, how much are these future cash flows worth today?

Group of answer choices

Option 1: $2,219,681.02

Option 2: $2,265,405.02

Option 3: $2,211,129.03

Option 4: $723,966.81

Option 5: $4,350,000.00

Option 6: $2,482,509.00

Option 7: $2,273,957.01

Reference no: EM132768923

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