Homework Help is Here – Start Your Trial Now!
Business
Accounting
Choose the correct answer with solution. Pls choose only the answer in the choices.

Choose the correct answer with solution. Pls choose only the answer in the choices.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Choose the correct answer with solution. Pls choose only the answer in the choices. 

Q1. 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

Q2. 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

Q3. 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

Q4. What is the net cash flow to equity?
a. 10,140,489
b. 11,103, 272
c. 11, 140, 489
d. 12, 103, 272

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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS