Marvin Enterprises
- VALUE OF CURRENT BUSINESS: VALUE
At price of $7 PV = 24 x 3.5/.20 420 - WINDFALL LOSS:
Since price falls to $5 after 5 years,
Loss = - 24 x (2 / .20) x (1 / 1.20)^5 - 96 - VALUE OF NEW INVESTMENT:
Rent gained on new investment = 100 x 1 for 5 years = 299
Rent lost on old investment = - 24 x 1 for 5 years = - 72
227 227
TOTAL VALUE: 551
CURRENT MARKET PRICE: 460