ACCOUNTING-Assume that the most you would pay for the business is 20 times
QUESTION
Assume that the most you would pay for the business is 20 times the monthly net income you could expect to earnfrom it. Compute this possible price.Nicholas states that the least he will take for the business is an amount equal to the business’s stockholders’ equity balance on January 31. Compute this amount.Under these conditions, how much should you offer Nicholas? Give your reason.
ANSWER:
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