Marko,Inc Is Considering the Purchase of ABC Co

Multiple Choice

Marko,Inc. 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