Marko inc is considering the purchase of abc co marko, Ask an Expert

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Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $6,600, $11,600, and $17,800 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a rate of return of 13 percent is applicable to this potential purchase.

Required:

Question: What is Marko willing to pay today to buy ABC Co.?

$39,420.00
$24,876.50
$28,896.22
$36,000.00
$27,261.50

Note: Please explain comprehensively and give step by step solution.

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Category:- Basic Finance
Reference No.:- M91149092

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