What is southeastern travel willing to pay today to acquire


Southeastern travel is considering acquiring Sunshine Tour. Management believes Sunshine Tour can generate cash flows of $157000, $200000, and $235000 over the next three years, respectively. After that time, they feel the business will be worthless. Southeastern travel has determined that a 10.5 percent rate of return is applicable to this acquisition. What is southeastern travel willing to pay today to acquire sunshine tour?

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