• Firm B's average annual income is $900, to continue for 10 years after purchase.
• Firm B's total owner's equity is $2,000.
• Firm B's market value of net identifiable assets is $3,500.
• The average rate of return in B's industry is 10%.
• The risk adjusted rate of return for the purchase is 8%.

Compute the purchase price for B implied by this information. The present value of an annuity of $1 for 10 years at 8% is 6.71008, and at 10% is 6.14457.

The answer is $7191

I don't understand Why we don't consider owners' equity for purchase price, that is $2000+$3691=$5691.
Because I think owners' equity is the net of asset and liability(kind of like the NET value of Firm B). IF we onl cosider net indenfiable assets, what's about the liabilities of Firm B?
Thanks.