What is the lowest rate of return


Response to the following problem:

An entrepreneur wants to purchase a particular small business. The asking price is $5 million. He expects to improve the business's operations over a period of five years and sell it at a handsome profit. To help him achieve this goal, a wealthy aunt is willing to loan the entrepreneur $5 million for five years at zero percent interest. Given this loan, what is the lowest rate of return the entrepreneur should be willing to accept on purchase of the business? Why?

Request for Solution File

Ask an Expert for Answer!!
Financial Accounting: What is the lowest rate of return
Reference No:- TGS02118332

Expected delivery within 24 Hours