This assignment aligns with Outcome 7: Evaluate business valuation approaches and methodology in communicating findings to stakeholders. Electronix Inc. manufactures electronic products. The company’s weighted average cost of capital is 8 percent. The company forecasted the following free cash flows for the next 20 years: Cash Flows Table Year Free Cash Flows 1 $15,000,000 2 $16,200,000 3 $21,000,000 4 $23,000,000 5 $27,000,000 6-10 $25,000,000 per year 11-20 $21,000,000 per year Prepare a valuation report for Electronix Inc. using the discounted cash flow approach. Identify the accounts taken into consideration in the discounted cash flow method. Compare the difference between future income method and the discounted future cash flow method.

This assignment aligns with Outcome 7: Evaluate business valuation approaches and methodology in communicating findings to stakeholders. Electronix Inc. manufactures electronic products. The company’s weighted average cost of capital is 8 percent. The company forecasted the following free cash flows for the next 20 years: Cash Flows Table Year Free Cash Flows 1 $15,000,000 2 $16,200,000 3 $21,000,000 4 $23,000,000 5 $27,000,000 6-10 $25,000,000 per year 11-20 $21,000,000 per year Prepare a valuation report for Electronix Inc. using the discounted cash flow approach. Identify the accounts taken into consideration in the discounted cash flow method. Compare the difference between future income method and the discounted future cash flow method.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 12P: Strickler Technology is considering changes in its working capital policies to improve its cash flow...

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Year	Free Cash Flows
1	$15,000,000
2	$16,200,000
3	$21,000,000
4	$23,000,000
5	$27,000,000
6-10	$25,000,000 per year
11-20	$21,000,000 per year

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Electronix Inc. Valuation This assignment aligns with Outcome 7: Evaluate business valuation approaches and methodology in communicating findings to stakeholders. Electronix Inc. manufactures electronic products. The company’s weighted average cost of capital is 8 percent. The company forecasted the following free cash flows for the next 20 years: Cash Flows Table Year Free Cash Flows 1 $15,000,000 2 $16,200,000 3 $21,000,000 4 $23,000,000 5 $27,000,000 6-10 $25,000,000 per year 11-20 $21,000,000 per year Prepare a valuation report for Electronix Inc. using the discounted cash flow approach. Identify the accounts taken into consideration in the discounted cash flow method. Compare the difference between future income method and the discounted future cash flow method.
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use the following information to develop a spreadsheet model that will calculate the free cash flows and the value of the equity for the company. cost of capital 12% most recent year's sales $1000 nonoperating assets $100 interest-bearing debt $250 operating profit margin 12% working capital/sales 35% fixed assets/sales 20% noninterest-bearing current liabilities/sales 10% rax rate 40% forecasted sales growth years 1-2 12% years 3-5 8% years 6-∞ 4% calculate the value of the firm and the value of the equity in the firm using DCF analysis.
Use the following information for numbers 23 to 25: Corporate Valuators, Inc. is assessing the value of two companies, Capital Corp. and Earm, Inc. which projects the following net cash flows in the next five years, with its desired required rate of return. Net cash flows approximate to be its earnings also. The balance sheet of Capital Corp. and Eam, Inc. has recorded Property, Plant and Equipment of P100 million and P200 million, respectively. Operating assets are estimated at 80% and 70% respectively and the rest are considered idle. Capital Corp. 8,000,000 8,800,000 9,680,000 10,648,000 11,712,800 Required return 8% Net cash flows Net cash flows Earn, Inc. 9,600,000 10,560,000 11,616,000 12,777,000 14,055,3 6% Year 1 2 3 4 23. Using capitalization of earnings, compute for the equity value of Capital Corp. 24. Using capitalization of earnings, compute for the equity value of Eam, Inc. 25. Which company has higher equity value?
The manager of a production system expects to spend $100,000 the first year with amounts decreasing by $10,000 each year. Income is expected to be $400,000 the first year, decreasing by $50,000 each year. a) Draw cash flow diagrams of expenditures and income separately over a 6 year period at an interest rate of 10% per year. b) Determine the present worth of the company's net cash flow (present worth = present income - present expenditure). Please write fomula and show your solution step by step. Use compound interest tables. How much money could a fim borow to finance a project if it is expected revenues of 5140,000 yeuly for the 9 years pesiod of time with the interest rate 9% per year? Please wnte fomuls and show your solutica step by step. Use compound iaterest tahles a) drawe the Cash fiow b) find the selution C) find the future value of the evenues
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Please find the Operating Cash Flow for the first 5 years with the following information below: Currently, Ljutic A/I Inc. has hired a consulting firm (Oakland Association-OA) to estimate the size of the market and hence expected unit sales for its main product (E-toral application sensor). OA’s work resulted in unit sales estimates of 318,331, 341,342, 368,769, 383,432, and 376,532 units respectively for the next five years conditioned on Ljutic adhering to an average sales price of $568 per unit for the first two years and $387 in years three, four, and five. From that point going forward, growth in unit sales is predicted to be 2.72% indefinitely. The results of an independent outside analysis by a leading market research firm has determined that the company can manufacture its product line at a variable cost per unit expected to be $63.47 growing at 2.23% per year for the first 5 years and 3.17% per year indefinitely thereafter while overall fixed costs are estimated to be…
Managerial Accounting
Observe the following statement: STATEMENT OF CASH FLOW FOR “COUCH POTATO TECHNOLOGIES P/L” For the year ending June 30 2011 2010 $000 2011 $000 Receipts from customers (sales) 350 180 Payments for purchases 50 60 Payments to employees 80 80 Purchase of assets 10 20 Payments for operating expenses 10 15 Additional Information: • Industry Average Efficiency : 20% • Net profit in 2010 : $21 000 a) Define the term working capital. b) Comment on the cash flow of Couch Potato Technologies P/L in 2010. c) Calculate and comment on the efficiency of Couch Potato Technologies P/L d) Calculate and comment on the net profit of Couch Potato Technologies P/L. e) Recommend TWO strategies that can be used to manage the working capital of Couch Potato Technologies P/L.
Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $7 million. The firm also has a profit margin of 27 percent, a retention ratio of 20 percent, and expects sales of $8 million next year. Assets Current assets Fixed assets Total assets Liabilities and Equity Additional funds needed $2,000,000 Current liabilities Long-term debt 5,000,000 Equity $7,000,000 Total liabilities and equity $2,500,000 1,500,000 3,000,000 $7,000,000 If all assets and current liabilities are expected to grow with sales, what amount of additional funds will Wind Em need from external sources to fund the expected growth? (Enter your answer in dollars not in millions.)
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