11. We need our forumla for the value of an asset that generates a fixed stream of revenue forever to estimate the value of the license. Since the typical owner earns $35,000 in her next best opportunity and $55,000 as a bar owner the license allows her to earn $20,000 per year in profits. Thus it's value V is roughly the same as that of any other asset which returns this stream of revenues R when the interest rate, I is 10%. remember that the forumla is V = R/I, so:
