Answer:
$23,977.29
Explanation:
In order to determine how much Marko would be willing to pay, we have to calculate the present value of the ABC Co.
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator:
Cash flow in year 1 =$4,800
Cash flow in year 2 = $9,800
Cash flow in year 3 = $16,000
I = 11%
Present value = $23,977.29
To find the PV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
