Texas Tires Auto Shop would like to purchase Max's Motor, another auto repair shop in...
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Accounting
Texas Tires Auto Shop would like to purchase Max's Motor, another auto repair shop in the neighboring town that is being sold for $350,000. Assume cash flows occur at the end of the year. Based on past sales volume, the owner of Texas Tires estimates the net cash flows that will be generated by the shop are as follows: Years Cash Flows 1-3 $60,000 4 65,000 5 75,000 6 80,000 In addition to the cash flows above, after eight years, the owner of Texas Tires can sell the shop for $475,000, if the interest rate on this investment is 9% compounded annually. Required
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