Five years ago your firm installed a quick-lube store on Connolly avenue.Southwest cellular would like your store to convert to one of its own outlets. They have made you an offer that nets you $600,000 after taxes. Your required return is 12%.
a.- You expect $ 75,000 cash flow after tax for the next 10 years. Should you abandon?
b.- Assume your annual cash flow is $120,000. What is the minimum offer you would accept?© BrainMass Inc. brainmass.com June 4, 2020, 1:20 am ad1c9bdddf
without taking their offer the present value of our store will be
(using financial calculator or excel)
CPT PV = 423,766.73
Therefore, we should ...
This solution helps with a problems regarding business decisions based on cash flows.