Business, 30.11.2019 07:31, sarahparah002

You have decided to leave the small advertising firm where you are a partner. the partnership agreement among the partners states that if a partner leaves, that person's ownership in the firm is "cashed out" with an immediate payment consisting of 5 percent of last year's revenue. last year the firm had revenue of $1 million. but your partners would rather not have to pay out this big cash flow to you this year because they are expecting much more business soon. in fact, they believe that they will be earning revenues of $1.5 million in just two years. so, they offer you a choice between taking 5 percent of last year's revenue now, or taking 4 percent of expected revenue in two years. if you believe an appropriate discount rate is 10 percent, which cash out payment should you accept?

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You have decided to leave the small advertising firm where you are a partner. the partnership agreem...