Marko Plc Is Considering the Purchase of ABC Co

question 69

Multiple Choice

Marko plc is considering the purchase of ABC Co.Marko believes that ABC Co.can generate cash flows of €5,000, €9,000, and €15,000 over the next three years, respectively.After that time, Marko feels ABC will be worthless.Marko has determined that a 14% rate of return is applicable to this potential purchase.What is Marko willing to pay today to buy ABC Co.?

• A)€19,201.76
• B)€21,435.74
• C)€23,457.96
• D)€27,808.17
• E)€31,758.00

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Definitions:

Making Money

The process of earning a profit or revenue, typically through business activities, employment, or investments.

Nonprofit Organization

An entity that operates for a purpose other than to make profits for its owners, often focused on social, charitable, or community goals.

For-Profit Organization

An organization that operates with the main goal of making a profit, typically by selling goods or services.

Privately Owned

property or businesses solely owned by individuals or private entities, not controlled by the government or public sector.