Rate of return is applicable to this potential purchase

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Reference no: EM131014790

1. Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $9,953, $6,030, and $13,798 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a 8.11 percent rate of return is applicable to this potential purchase. What is Marko willing to pay today to buy ABC Co.?

2. One year ago, the Jenkins Family Fun Center deposited $8,794 in an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $9,845 to this account. They plan on making a final deposit of $8,206 to the account next year. How much will be available when they are ready to buy the equipment, assuming they earn a 9 percent rate of return?

Reference no: EM131014790

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Rate of return is applicable to this potential purchase : Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $9,953, $6,030, and $13,798 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determ..

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