Future value: CelebNav, Inc., had sales last year of $700,000, and the analysts are predicting strong future performance for the start-up, with sales growing 20 percent a year for the next three years. After that, the sales should grow 11 percent per year for two years, at which time the owners are planning to sell the company. What are the projected sales for the last year before the sale?

Future value: CelebNav, Inc., had sales last year of $700,000, and the analysts are predicting strong future performance for the start-up, with sales growing 20 percent a year for the next three years. After that, the sales should grow 11 percent per year for two years, at which time the owners are planning to sell the company. What are the projected sales for the last year before the sale?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The company you work for is considering a new product line that is projected to have the net cash flows below (in $1000). The values are in future dollars which have been inflated by 5% per year. The plant manager isn’t sure about how the present worth of the cash flows should be calculated, so he asked you to do it two ways over the 4-year planning horizon: (1) using an inflation-adjusted rate of 20% per year, and (2) converting all of the cash flows to current-value dollars and using a real interest rate. You said both ways will provide the same answer, but he asked you to show him the calculations. Prepare the present worth computations by methods (1) and (2).
Hotel Today Ltd. is thinking of buying a real estate asset. The asset's projected stabilized NOI for the following year is $ 5,400,000 and it is currently selling for $ 65 million based on the market cap rate perception. Hotel Today Ltd. has a required return of 9% on this investment. Based on market forecasts, they have estimated a 1.5% growth per annum. Based on their internal cap rate perception, is it a good buy and why?
Trend-Line Inc. has been growing at a rate of 6% per year and is expected to continue to do so indefinitely. The next dividend is expected to be $8 per share. a. If the market expects a 10% rate of return on Trend-Line, at what price must it be selling i.e. Current selling price?
A company projects a rate of return of 20% on new projects. The executive team plan to plow back 20% of all earnings into the firm. Earnings this year will be $6 per share, and investors expect a rate of return of 12% on stocks facing the same risks as the company. 1) what is the sustainable growth rate 2) what is the stock price 3) What is the present value growth opportunities 4) what is the P/E ration 5) what would the price and PE ratio be if the firm paid out all earnings as dividends?
Today (n=0), a company invests $1,000 and expects that investment to grow 10% each period for the next six periods (n=6). What is the investment's expected future value?
Caspian Sea Drinks is considering buying the J - Mix 2000. It will allow them to make and sell more product. The machine cost $1.92 million and create incremental cash flows of $582, 193.00 each year for the next five years. The cost of capital is 9.20 %. What is the profitability index for the J - Mix 2000?
Salalah Wind Energy has taken up a new project with an initial investment of 50000 OMR.The expected future cashflow from the project over the next three years will be 22500 OMR, 23500 OMR and 24500 OMR.What is the profitability index if the discount rate is 7 percent?
Shabbona Partners expects to have free cash flows of $38,950,000 next year, and free cash flows are expected to grow at a constant rate of 3% per year. If the firm's WACC is 9% per year, what is the value of Shabbona's operations?
The market for widgets is increasing by 15% per year from current profits of $2,000,000. Investing in a design change will allow the profit per widget to stay steady; otherwise the price will drop by 3% per year. If inflation in the economy is 4%, what is the present worth in Year-1 dollars of the savings over the next 5 years? 10 years? The interest rate is 10%.
Laurel Enterprises expects earnings next year of $4.29 per share and has a 50% retention rate, which it plans to keep constant. Its equity cost of capital is 11%, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 5.5% per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be? The current stock price will be $ (Round to the nearest cent.)
A company is considering a 5-year project. The company plans to invest $85,000 now and it forecasts cash flows for each year of $21,855. The company requires a hurdle rate of 7%. Calculate the internal rate of return to determine whether it should accept this project.
Laurel Enterprises expects earnings next year of $3.99 per share and has a 50% retention rate, which it plans to keep constant. Its equity cost of capital is 11%, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 5.5% per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be?