Assumptions Projected Revenue 10,000 10,500 11,000 Projected Operating Income (EBIT) 1,000 1,100 1,200 depreciation/Sales 10.00% 10.00% 10.00% Capital Expenditure/Sales 5.00% 5.00% 5.00% Interest Expense 300 300 300 Increase in Net Working Capital/Sales 2.00% 2.00% 2.00% Marginal Tax Rate 30.00% 30.00% 30.00% Weighted Average Cost of Capital (WACC) 10.00% 10.00% 10.00% Terminal Growth Rate (%) 4.00% 4.00% 4.00% Market Value of Debt 5,000 5,000 5,000 Number of Share Outstanding 200 200 200 Today FY1 FY2 FY3 EBIT (Earnings before Interest & Tax) Interest Expense Tax Net Income Depreciation Operating Cash Flow (OCF) Capital Expenditure Increase in Net Working Capital Free Cash Flow (FCF) Terminal Value PV of FCF and Terminal Value Sum of All PV ( Enterprise value) Market Value of Debt Value of Equity Number of Share Outstanding Share Price

Q: Solution was marked wrong.

A: Future value refers to the concept of time, the value of money used for determining the value of…

Q: Give two examples of errors of principle?

A: Errors of principle refers to errors that are carried out at time of noting down transactions…

Q: Why does the FASB recommend the direct method over the indirect method?

A: Definition:   Financial accounting standards board (FASB): This is the organization that creates,…

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A:

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A: Child Tax Credit is $3,600 for children aged 6 and Under at end of 2021 Child Tax Credit is $3,000…

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A: Sarbanes-Oxley Act is formulated during 2002 under US federal law. The prime purpose of the act is…

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A: When net credit sales is divided with average accounts receivable it results in receivable turnover…

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A: Extraordinary things vs. Nonrecurring Items: an summaryExtraordinary things area unit gains or…

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A: Answer: A pre-emptive right is a benefit that can be granted to other owners in a company that gives…

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A:

Q: Why is a preemptive right important?

A: Preemptive rights means the rights to  be offered to purchase a property before it is offered to…

Q: True or false: IFRS is based on the same characteristics of information as AspE

A: IFRS:It stands for International Financial Reporting Standards, a set of accounting standards…

Q: Which are the disadvantage of a C corp?

A: C corporation is the corporation that is taxed separately from its owners or shareholders.  In other…

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A: The Annual Percentage Rate: The annual percentage rate is the nominal rate quoted by financial…

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A:

Q: What Constitutes a Discontinued Operation?

A: Income statement: The financial statement which reports revenues and expenses from business…

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A: The question is a follow-up question, and, the learner has reposted it to clear the confusion so…

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A: An expense that benefits more than one product and for which the contribution to each product cannot…

Q: utio

A: In general, a "eligible rollover distribution" is any payment paid in a lump sum or over a period of…

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A: Here,Quarter Dividend is $1.50Growth Rate is 6.25%Required Return is 9%Quarterly Required Return is…

Q: Give two examples of errors of commission?

A: Accounting error: Accounting errors can be defined as omission of the fundamental accounting…

Q: What is the primary difference between the APT and the CAPM?

A: APT is an abbreviation used for arbitrage Pricing Theory whereas CAPM is an acronyms used for…

Q: Not sure

A: Formulas: Minimum stock price = Face value / Convertible shares