The owner of a firm has decided that he wants to sell it for $5,000,000, and he sets out to increase annual profits up to the level required to attain this value. If the annual discount rate is 10 percent and the level of profit can be expected to continue indefinitely, how much annual profit must the firm earn to attain the value that the owner seeks?

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The Answer of The owner of a firm has decided that he wants to sell it for $5,000,000, and he sets out to increase annual profits up to the level required to attain this value. If the annual discount rate is 10 percent and the level of profit can be expected to continue indefinitely, how much annual profit must the firm earn to attain the value that the owner seeks?

The Owner of a Firm Has Decided That He Wants