Southern tours is considering acquiring holiday vacations. management believes holiday vacations can generate cash flows of $218,000, $224,000, and $238,000 over the next three years, respectively. after that time, they feel the business will be worthless. if the desired rate of return is 14.5 percent, what is the maximum southern tours should pay today to acquire holiday vacations?
(a) $519,799.59
(b) $538,615.08
(c) $545,920.61
(d) $595,170.53
(e) $538,407.71

(A) $519,799.59

Explanation:

we will calcualte the present value of a lump sum for each cashflow considering the 14.5% discount rate:

rate: 0.145

year 1

190,393.0131

year 2

170,858.6793

year 3

158,547.9011

adding each PV gets: 519799.5935

better off having an absolute

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.