The potential pitfalls of analyzing the transactions based on the IRR or cash multiple. Introduction: The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

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Chapter 19.5, Problem 2CC

Summary Introduction

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

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Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes): Income Statement Balance Sheet Sales Costs $ 40,000 Assets 34,160 $26,000 Debt Equity $ 7,000 19,000 Net income $ 5,840 Total $26,000 Total $26,000 The company has predicted a sales increase of 20 percent. Assume Yoo pays out half of net income in the form of a cash dividend. Costs and assets vary with sales, but debt and equity do not. Prepare the pro forma statements. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to the nearest whole dollar amount.) Pro forma income statement Sales Costs $ 48000 40992 Assets $ 31200 Pro forma balance sheet Debt 7000 Equity 19000 Net income $ 7008 Total $ 31200 Total 30304 What is the external financing needed? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.) External financing needed $ 896

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Answer 2

Question

Chapter 19.5, Problem 2CC

Summary Introduction

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

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Answer 3

Question

Chapter 19.5, Problem 2CC

Summary Introduction

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

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Answer 4

Question

Chapter 19.5, Problem 2CC

Summary Introduction

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

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Answer 5

Chapter 19.5, Problem 2CC

Summary Introduction

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

Answer 6

Chapter 19.5, Problem 2CC

Summary Introduction

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

Answer 7

Chapter 19.5, Problem 2CC

Summary Introduction

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

Answer 8

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Answer 9

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Answer 11

Ch. 19.1 - Prob. 1CC Ch. 19.1 - Prob. 2CC Ch. 19.2 - Prob. 1CC Ch. 19.2 - Prob. 2CC Ch. 19.3 - What is a pro forma income statement?Ch. 19.3 - Prob. 2CC Ch. 19.4 - Prob. 1CC Ch. 19.4 - Prob. 2CC Ch. 19.5 - Prob. 1CC Ch. 19.5 - Prob. 2CC

The potential pitfalls of analyzing the transactions based on the IRR or cash multiple. Introduction: The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

Solution Summary: The author explains the potential pitfalls of analyzing transactions based on the cash multiple and internal rate of return (IRR).

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

Want to see the full answer?

Chapter 19 Solutions

The potential pitfalls of analyzing the transactions based on the IRR or cash multiple. Introduction: The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

Solution Summary: The author explains the potential pitfalls of analyzing transactions based on the cash multiple and internal rate of return (IRR).

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple. Introduction: The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.

Want to see the full answer?

Chapter 19 Solutions

To discuss: The potential pitfalls of analyzing the transactions based on the IRR or cash multiple.

Introduction:

The practitioners of the real world will use the cash multiple and internal rate of return (IRR) to evaluate the transactions.