In: Finance
Wally, president of Wally's Burgers, is considering franchising. He has a potential franchise agreement that would allow him to receive 12 end-of-year payments starting one year from now. The first two payments would be $26,000 and $24,000 in one and two years respectively, and then $20,000 per year after that for 10 years. If Wally requires a return of 10.6%, what is the present value of this stream of cash flows?