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Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate...

Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $6,600, $11,600, and $17,800 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a rate of return of 13 percent is applicable to this potential purchase. What is Marko willing to pay today to buy ABC Co.?

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Answer #1

Value = PV of Cash flows from it.

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