How much would you recommend offering for this guesthouse

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Reference no: EM133344299

Question: A guesthouse that is currently being sold has been producing a current annual net cash flow of US$150,000 for several years, which is expected to continue growing at a rate of 5% per annum for 10 years and then grow at a rate of 3% for a long period of time. A family group is interested in acquiring it and requires an effective annual rate of return of 15% for this type of investment. If you were to advise the economic group, how much would you recommend offering for this guesthouse?

Reference no: EM133344299

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