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You Are Considering Buying a Business That Currently Earns $15,000

Question 120

Multiple Choice

You are considering buying a business that currently earns $15,000 per year in after-tax profit. If these conditions are expected to continue into the future, and the interest rate is currently 10 percent, the current market value of this business is


A) $1,500.
B) $15,000.
C) $150,000.
D) $1,500,000.

Correct Answer:

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