Questions and refer to the problem below.
A businessman is contemplating purchasing a company for The company is expected to operate for years, and the following profits are expected:
tableYEARPROFIT RDISCOUNT FACTOR,PRESENT VALUE RSD
A company of this type is expected to return a yearly profit of
QUESTION
Marks
The missing values and respectively, are:
a and
and
c and
D and
QUESTION
Marks
What should be the final decision?
A Do not buy the company since there is a nett loss of
B Buy the company since there is a nett profit of
c Buy the company since there is a nett profit of
D Do not buy the company since there is a nett loss of
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