Give me correct answer general accounting The average net profits expected in the future by Khalifa andCo. are RO. 30,000 per year. The average capital employed inthe business by the firm is RO. 200,000. The normal rate ofreturn on the capital employed in a similar business is 10%.Calculate goodwill of the firm by:1. Super Profit Method on the basis of two-year purchase.2. Capitalization Method.

To calculate the goodwill of Khalifa and Co., here are the solutions using both methods: 1. Super…

Answered: The average net profits expected in the…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 9MC

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General accounting
Calculate a firm's free cash flow if it has net operating profit after taxes of P60,000, depreciation expense of P7,000, an interest expense of P1,000, a net fixed asset investment of P30,000, a net current asset requirement of P15,000 and a tax rate of 30%.
The profits of firm for the five years are as follows: Year Profit (Rs.) 2012-13 20,000 2013-14 24,000 2014-15 30.000 2015-16 25.000 2016–17 8,000 Calculate the value of goodwill on the basis of three years' purchase of weighted average profits based on weights 1,2,3,4 and 5 respectively.
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Which of the following two companies creates more value, assuming that they are making the same initial investment? Company A's projected profits Year Last year 1 (forthcoming year) 2 3 4 Profit (£000s) 1,000 1,000 1,100 1,200 1,400 1,600 1,800 5 6 and all subsequent years Company B's projected profits Profit (£000s) Year Last year 1 (forthcoming year) 2 3 4 5 6 and all subsequent years 1,000 1,000 1,080 1,160 1,350 1,500 1,700 Profits for both companies are 20% of sales in each year. With company A, for every £1 increase in sales 7p has to be devoted to additional debtors because of the generous credit terms granted to customers. For B, only 1p is needed for additional investment in debtors for every £1 increase in sales. Higher sales also mean greater inventory levels at each firm. This is 6p and 2p for every extra £1 in sales for A and B respectively. Apart from the debtor and inventory adjustments, the profit figures of both firms reflect their cash flows. The cost of capital for…
Use the following information to answer the next question. Total Asset = $40 million Basic earning power (BEP) ratio is 20% Times-interest-earned (TIE) Principal payments = 4 million ratio is 6.55 $1.35 million; $0.37 million What is the company's EBIT? The company's interest expense? $3.33 million; $0.83 million $8.0 million; $0.62 million Depreciation = $1.0 million. $7.5 million; $0.75 million Lease payments = 0.6 million $8.0 million; $1.22 million
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Based on the profit maximization goal, the financial manager would choose Asset D. Asset B. Asset A. Asset C.
A firm has the following investment alternatives (refer to image): Each investment costs $3,000; investments B and C are mutually exclusive, and the firm’s cost of capital is 8 percent. a.) What is the net present value of each investment? b.) According to the net present values, which investment(s) should the firm make? Why? c.) What is the internal rate of return on each investment?
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How much is the intrinsic value of GWAPO Corporation if the required return for this business is 12%? (Use 5 decimal places for Present Value factors)
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