Jeogiyo Company, which is a company specifically created for a joint venture agreement to extract gold, will end its corporate life in 5 years. Cash Flows expected during the operating years are as follows: YEAR CASH INFLOWS CASH OUTFLOWS 1 23 3 45 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 500,000 450,000 400,000 350,000 300,000 • At the end of its life, Jeogiyo estimates to incur Php 8,000,000 for closure and rehabilitation costs for its mining site and other costs related to the liquidation process. • Cost of capital is set at 12%. Remaining assets by end of the corporate life will be bought by another company for Ph 20,000,000 and taxes due of Php 3,000,000 will be fully paid off by then. • Present value factors are rounded up to 4 decimal places. If the valuation happens now, the value of Jeogiyo Company is (disregard the currency symbol and don't put commas; enter the numbers only):
Jeogiyo Company, which is a company specifically created for a joint venture agreement to extract gold, will end its corporate life in 5 years. Cash Flows expected during the operating years are as follows: YEAR CASH INFLOWS CASH OUTFLOWS 1 23 3 45 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 500,000 450,000 400,000 350,000 300,000 • At the end of its life, Jeogiyo estimates to incur Php 8,000,000 for closure and rehabilitation costs for its mining site and other costs related to the liquidation process. • Cost of capital is set at 12%. Remaining assets by end of the corporate life will be bought by another company for Ph 20,000,000 and taxes due of Php 3,000,000 will be fully paid off by then. • Present value factors are rounded up to 4 decimal places. If the valuation happens now, the value of Jeogiyo Company is (disregard the currency symbol and don't put commas; enter the numbers only):
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 5P
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Jeogiyo Company, which is a company specifically created for a joint venture agreement to extract
gold, will end its corporate life in 5 years. Cash Flows expected during the operating years are as
follows:
YEAR
1
2
3
45
CASH INFLOWS CASH OUTFLOWS
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
500,000
450,000
400,000
350,000
300,000
• At the end of its life, Jeogiyo estimates to incur Php 8,000,000 for closure and rehabilitation
costs for its mining site and other costs related to the liquidation process.
• Cost of capital is set at 12%. Remaining assets by end of the corporate life will be bought by
another company for Ph 20,000,000 and taxes due of Php 3,000,000 will be fully paid off by
then.
• Present value factors are rounded up to 4 decimal places.
If the valuation happens now, the value of Jeogiyo Company is (disregard the currency symbol and
don't put commas; enter the numbers only):
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