Problem
A company is expecting sustained growth for the next 15 years due to a patent it has successfully defended. Next year the company is expected to bring in net cash flows of $350,000. The company expects its earnings to grow annually at a rate of 15% for the next 5 years and then by 7.5% for the remainder of the 15 year horizon. What is the present value of the patent - this growing annuity - if the company uses a discount rate of 12 percent on its investments?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.