eco Now lets revisit the same POWSA venture but assume my projection of revenue and cost makes sense for eight years with no profitability after that (either because I will needto reduce my price in year nine to sustain sales volume or I will shut down after 8 years). What is the market value of POWSA equity in that case? Hint: use a spreadsheet toget the present value of anticipated dividends (or use the annuity formula if you are familiar with that)O $21.34 million so that Warren buffet would need something like a 95% stake to make the deal worth his whileO $25 million so that Warren Buffet would need an 80% stake to make it worth his whileO $17 million so the venture is not viable if $20 million of funding is required for the marketingO $32 million so that Warren Buffet would need more than a 50% stake to make it worth his while

Part 2: Explanation:Step 1: Determine the cash flows for the eight years.- Calculate the anticipated…

Answered: Now lets revisit the same POWSA venture…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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