Wally, president of Wally's Burgers, is considering franchising. He has a potential franchise agreement that would see him receive 13 end-of-year payments starting one year from now. The first two payments would be $30, 000 and $ 25,000 in one and two years respectively, and then $21,000 per year after that for 11 years. If Wally requires a return of 6%, what is the present value of this stream of cash flows?

Wally, president of Wally's Burgers, is considering franchising. He has a potential franchise agreement that would see him receive 13 end-of-year payments starting one year from now. The first two payments would be $30, 000 and $ 25,000 in one and two years respectively, and then $21,000 per year after that for 11 years. If Wally requires a return of 6%, what is the present value of this stream of cash flows?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10PB: Bouvier Restaurant is considering an investment in a grill that costs $140,000, and will produce...

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