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2 Franchise Valuea) Suppose that Mark Cuban wants to purchase the Mavericks in2000 (call this year 0), and he expects to receive $400,000 inprofits in years 1, 2, and 3 (each year). Now suppose that value ofthe Mavericks in year 3 is $500 million and that the interest rateis 4%. What is price that Mark would pay to make him break even in3 years (i.e. that makes E[B] – p =0)?b) Now, suppose that Mark Cuban plans to purchase the Mavericksin 2000 for $285 million and he expects to receive $400,000 inprofits in years 1, 2, and 3 (each year). Now suppose that theinterest rate is 4%. What would be the value of the Mavericks in 3years that would make Mark break even?c) Finally suppose Mark plans to purchase the Mavericks at $285million in 2000. The value of the mavericks will be $500 million in3 years and the interest rate is 4%. Suppose the expected profitsfor years 1, 2, and 3 is x (i.e. Mark expects to receive x in year1, x in year 2, and x in year 3). What is value of x that wouldmake Mark break even?