A firm will generate a net after-tax cash flow of 100000


A firm will generate a net after-tax cash flow of $100,000 one year from today. Every year thereafter, until and including the end of year 15, the cash flows will decrease by 6 percent. At the end of year 15 the firm can be sold for $900,000. What is the value of this firm today, if the appropriate discount rate is 10 percent compounded semiannually?

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Financial Management: A firm will generate a net after-tax cash flow of 100000
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