Wally, president of Wally's Burgers, is considering franchising. He has a potential franchise agreement that would allow him to receive 16 end-of-year payments starting one year from now. The first two payments would be $25.000 and $23.000 in one and two years respectively, and then $20.000 per year after that for 14 years. If Wally requires a return of 9.4%, what is the present value of this stream of cash flows?
What is the present value of this stream of cash flows?