MrZhu Is Selling His Business for Retirement

question 18

Multiple Choice

Mr.Zhu is selling his business for retirement.It is expected that the cash flows from his business in each of next 5 years will be $500,000.At the end of the 5 years,the residual value of the business is expected to be $8 million.Mr.Zhu has his expected rate of return of 12.0% .What could be the closest estimate to his "fair market value" (of similar business) at which he would be willing to sell his business?

• A) $6.34 million
• B) $6.00 million
• C) $5.80 million
• D) $6.50 million

---

Definitions:

Reading Disorder

A learning disorder characterized by significant difficulties in reading accuracy, speed, or comprehension that are not consistent with the person's cognitive abilities.

Forearm Strength

The muscular power and capability of the forearm, impacting activities such as gripping, lifting, and carrying.

Phonetic Method

A method for learning to read in which children decode the sounds of words based on their knowledge of the sounds of letters and letter combinations.

Preoperational Children

A stage in Piaget's theory of cognitive development, where children ages 2 to 7 engage in symbolic play and struggle with logic and taking the perspective of others.