Estimate a Venture's Terminal Value Based on the Following Information

question 30

Multiple Choice

Estimate a venture's terminal value based on the following information: current year's net income = $20,000; next year's expected cash flow = $26,000; constant future growth rate = 7%; and venture investors' required rate of return = 20%.

• A) $156,846
• B) $285,714
• C) $200,000
• D) $150,000
• E) $428,571