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oper cive fina

oper cive fina

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 is Net Cash Flow: 59,468,971 and Reasonable Price: 9,893,794

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b 24. Unicap Company is opening its doors to investors and shared the VALUATION CONCEPTS AND METHODOLOGIES following prospective financial information: 2021 2022 10,000,000 12,000,000 14,000,000 2023 Revenues 2024 15,000,000 Cost of Goods Sold 5,000,000 6,000,000 7,000,000 7,500,000 Gross Profit Selling and Distribution 5,000,000 6,000,000 1,200,000 1,000,000 7,000,000 7,500,000 Administrative 400,000 1,400,000 1,500,000 400,000 400,000 400,000 Depreciation Expense 2,000,000 2,000,000 2,000,000 2,000,000 Operating Income Income Tax Expense 1,600,000 2,400,000 3,200,000 3,600,000 480,000 720,000 960,000 1,080,000 Net Profit 1,120,000 1,680,000 2,240,000 2,520,000 Required Annual Capital Investment 1,000,000 1,000,000 1,000,000 1,000,000 XYZ, an equity capital venture company, is considering infusing money to Unicap Company. Based on its assessment, cost of capital associated with this type of investment is at 10%. Unicap Company has going concern assumption with net cash flows expected to grow by 5%. In addition to potential capital investment, Unicap Company has outstanding debt of P10,000,000. What is the net cash flow to the firm of Unicap Company? a. Php70,958,800 b. Php59,468,971 C. Php54,879,120 a. Php50,488,355 4 25. Refer to Unicap Company. If XYZ Company is buying 20% of Unicap Company, what is the reasonable price that they should pay? a. Php49,468,971 b. Php17,096,000 C. Php11,893,794 d. Php9,893,794
Transcribed Image Text:b 24. Unicap Company is opening its doors to investors and shared the VALUATION CONCEPTS AND METHODOLOGIES following prospective financial information: 2021 2022 10,000,000 12,000,000 14,000,000 2023 Revenues 2024 15,000,000 Cost of Goods Sold 5,000,000 6,000,000 7,000,000 7,500,000 Gross Profit Selling and Distribution 5,000,000 6,000,000 1,200,000 1,000,000 7,000,000 7,500,000 Administrative 400,000 1,400,000 1,500,000 400,000 400,000 400,000 Depreciation Expense 2,000,000 2,000,000 2,000,000 2,000,000 Operating Income Income Tax Expense 1,600,000 2,400,000 3,200,000 3,600,000 480,000 720,000 960,000 1,080,000 Net Profit 1,120,000 1,680,000 2,240,000 2,520,000 Required Annual Capital Investment 1,000,000 1,000,000 1,000,000 1,000,000 XYZ, an equity capital venture company, is considering infusing money to Unicap Company. Based on its assessment, cost of capital associated with this type of investment is at 10%. Unicap Company has going concern assumption with net cash flows expected to grow by 5%. In addition to potential capital investment, Unicap Company has outstanding debt of P10,000,000. What is the net cash flow to the firm of Unicap Company? a. Php70,958,800 b. Php59,468,971 C. Php54,879,120 a. Php50,488,355 4 25. Refer to Unicap Company. If XYZ Company is buying 20% of Unicap Company, what is the reasonable price that they should pay? a. Php49,468,971 b. Php17,096,000 C. Php11,893,794 d. Php9,893,794
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