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Answer the following questions with SOLUTIONS. Pls choose only the answer in the choices.  Q1.What is the net cash flow to equity? a. 10,140,489 b. 11,103, 272

Answer the following questions with SOLUTIONS. Pls choose only the answer in the choices.  Q1.What is the net cash flow to equity? a. 10,140,489 b. 11,103, 272

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer the following questions with SOLUTIONS. Pls choose only the answer in the choices. 

Q1.What is the net cash flow to equity?
a. 10,140,489
b. 11,103, 272
c. 11, 140, 489
d. 12, 103, 272 

Q2.What is the net Cash flow to the Firm?
a. 11,140,489
b. 12,103,272
c. 12,808,412
d. 13,974,000


Q3.  How much is the terminal value recognized after the three-year forecast period?
a. 10,880,000
b. 12,466,667
c. 13,090,000
d. 10,880,000

Q4. How much is the net cash flow of Gising Company in Year 1?
a. 390,000
b. 290,000
c. 220,000
d. 140,000

Gising Company is preparing the following financial information for presentation to prospective investors. Year 1 Year 2 Year 3 Revenues 1,000,000 1,500,000 2,000,000 Cost of Goods Sold 500,000 700,000 1,100,000 Operating Expenses 300,000 500,000 700,000 Corporate income tax rate is 30%. Gising Company is looking at a 5% constant growth on net cash flows after the three-year historical forecast they prepared. Weighted average cost of capital of Gising Company is 8%. The operating expenses include annual depreciation of Php250,000. Gising Company has long-term debt amounting to Php1,000,000. Gising Company projected that it will need additional PhP50,000 every year to support increasing working capital requirements and Php 120,000 for capital investments.
Transcribed Image Text:Gising Company is preparing the following financial information for presentation to prospective investors. Year 1 Year 2 Year 3 Revenues 1,000,000 1,500,000 2,000,000 Cost of Goods Sold 500,000 700,000 1,100,000 Operating Expenses 300,000 500,000 700,000 Corporate income tax rate is 30%. Gising Company is looking at a 5% constant growth on net cash flows after the three-year historical forecast they prepared. Weighted average cost of capital of Gising Company is 8%. The operating expenses include annual depreciation of Php250,000. Gising Company has long-term debt amounting to Php1,000,000. Gising Company projected that it will need additional PhP50,000 every year to support increasing working capital requirements and Php 120,000 for capital investments.
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