Question: Buyout Company \(A\) is attempting to negotiate a buyout of Company B. Company B accountant project an annual income of $2.8$ million dollars year. Accountants for Company A project that Company B's assets, Company A could produce income starting at $1.4$ million dollars per year an growing at a rate of \(5 \%\) per year. The discount rate (the rate at which income can be reinvested) is for both companies. Suppose that both companies consider their incomes over a 10 -year period. Company A's top offer is equal to the present value of projected income, and Company B's bottom price equal to the present value of its projected income Will the two companies come to an agreement the buyout? Explain.

Price: $2.99

Solution: The downloadable solution consists of 1 pages
Deliverable: Word Document