The company XYZ S.A. has the following assets: Stocks: Expect to receive cash dividends of $ 750 annually indefinitely. Required yield: 8% Land: expected to sell for $ 235,000 within 6 years. Required yield 9% Machinery: Expect to receive a cash flow of $ 15,000 at the end of year 1, $ 9,500 at the end of year 3, and $ 35,000 at the end of year 5 from the sale of the machinery. Required yield 20% Calculate the value of each asset with the basic valuation model.
Q: The MoMi Corporation's cash flow from operations before interest and taxes was $4.2 million in the…
A: Free cash flow is the cash flow which is available with the firm to distribute to the shareholders.…
Q: Heavy Metal Corporation is expected to generate the following free cash flows over the next five…
A:
Q: Stay Swift Corp. has an expected net operating profit after taxes, EBIT(1 T), of $14,700 million in…
A: Hi student Since there are multiple questions, we will answer only first question. Free cash flows…
Q: The current year profits of Levelex Inc. is 1.000.000₺ and expected profits for the next year is…
A: Constant dividend model is the model of share valuation in which the share price is calculated on…
Q: Crazytown Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in…
A: EBIT Year 1 = $680,000 Depreciation = $45,000 Increase in Net working capital = $9,000 Capital…
Q: Tin Roof's net cash flows for the next three years are projected at $72,000, $78,000, and $84,000,…
A: Year Cash flows 1 72000 2 78000 3 84000 Capital Cost Weight Debt 6.20% 30% Equity…
Q: ortunity to invest the money at 24% per annum. The company spends, on the average, P40 for every…
A: These costs are expressed as: F x [T/C] + i.[C/2] Where: F =Fixed cost of a transactionT =Total Cash…
Q: Crarytown Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in…
A: Cashflow during year 1: = EBIT * (1-tax rate) + depreciation - capital expenditure - working…
Q: You have been given information on the cash flows for the next three years for AMG inc., a…
A: Expected Growth EBIT =Reinvestment Rate ×Return on capitalGiven: EBIT (1-t) in Year 3=$121Growth…
Q: A firm expects to generate $100 million in free cash flow in a year. This free cash flow is…
A: Calculation of the worth of the firm’s common stock is shown: Hence, the value of common stock is…
Q: Al-Shamukh Constructors Ltd. currently has sales of OMR 24 million a year, with a stock level of 25…
A: Cost of stock levels = Sales × given paercentage=OMR 24 million × 25%=OMR 6 million Operating…
Q: Afterpay Ltd’s current year’s free cash flow is $20 million. It is projected to grow at 12% per year…
A: For terminal cash flow/horizontal value:-CF6/(ke-g) where ke=7%,and g=3%…
Q: Investors require a 10 percent per year return on the stock of the Rabiya’s Corporation, which…
A: The company is considering the operating activities for the purpose of earnings income. The income…
Q: A company is forecasted to generate free cash flows of $64 million for the next three years. After…
A: Free cash flow valuation model for value of equity consider the present value of all future cash…
Q: Red Valley Breweries is considering an acquisition of Flagg Markets. Flagg currently has a cost of…
A: Unlevered cost of equity is the cost when the firm has zero debt in its capital structure, this is…
Q: An Analyst is evaluating Quickie Inc. and shared the following projected net cash flows for the next…
A: Compounded annual growth rate formula = Ending valueBegining value1/ no.of years -1…
Q: Pearl Corp. is expected to have an EBIT of $2,400,000 next year. Depreciation, the increase in net…
A: Let us first calculate the firm value of Pearl Corp. The firm value is equal to sum of the present…
Q: Aluworks Co. is expected to pay a $21.00 dividend next year. The dividend will decline by 10 percent…
A: The question is based on the concept of valuation of stock based on discounting of expected future…
Q: If Quail Company invests $50,000 today, it can expect to receive $10,000 at the end extra $6,000 at…
A: calculation of net present value are as follows
Q: EmKay Inc. has $1,000,000 available to invest. It has narrowed its choices to two investments, and…
A: a) Net present value (NPV) is the contrast between the present value of money inflows over some…
Q: A firm’s current profits are P550,000. These profits are expected to grow indefinitely at a constant…
A: Firm Value: The value of a company, sometimes referred to as Firm Value (FV) or Enterprise Value…
Q: Heavy Metal Corporation is expected to generate the following free cash flows over the next five…
A: Formulae: Value of the business (enterprise value) = FCF/(1+r) + FCF2/(1+r)^2 + ...... + FCF/(1+r)^n…
Q: Pearl Corp. is expected to have an EBIT of $1,900,000 next year. Depreciation, the increase in net…
A: Given information: EBIT is $1,900,000 Depreciation is $160,000 Net working capital is $80,000…
Q: The white oak company's annual sales are 219 million van average of 9 days elapses between when a…
A: GIVEN The white oak company's annual sales are 219 million van average of 9 days elapses between…
Q: Al-Shamukh Constructors Ltd.currently has sales of OMR 24 million a yearwith a stock level of 25…
A: Return on assets is equal to net income divided by total assets.
Q: Puckett Products is planning for $3 million in capital expenditures next year. Puckett's target…
A: Ratio analysis is a method of measuring the financial position of the organization with different…
Q: A company is forecasted to generate free cash flows of $29 million next year and $29 million the…
A: The total cash that a company has to pay off to its liabilities and dividend to its shareholders is…
Q: The financial manager of the company SFT Inc. made the following forecasts concerning the free cash…
A: To find the residual value of the company in XX+4, we will use The Gordon Growth Model GGM model.…
Q: Galeshouse Gas Stations, Inc ., expects to increase from $1,500,000 to $1,700,000 nect year. Mr.…
A: Solution:- Introduction:- The following information given in the problem as follows:- Expected…
Q: Year-to-date, Company O had earned a −2.10 percent return. During the same time period, Company V…
A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…
Q: Stay Swift Corp. has an expected net operating profit after taxes, EBIT(1-T), of $14,700 million in…
A: Free cash flow is the cash generated by the company after providing for its operational activities…
Q: Al-Shamukh Constructors Ltd. currently has sales of OMR 24 million a year, with a stock level of 25…
A: Rate of return on assets is the rate which denotes the return which is earned on the assets of the…
Q: The projected cash flow for the next year for Minesuah Inc. is $125,000, and FCF is expected to grow…
A: The value of the firm can be expressed using a different formulas. An organization may use the…
Q: Pearl Corp. is expected to have an EBIT of $2,900,000 next year. Depreciation, the increase in net…
A: EBIT Year 1 = $2,900,000 Depreciation = $160,000 Increase in Net working capital = $130,000 Capital…
Q: The MoMi Corporation’s cash flow from operations before interest and taxes was $2.2 million in the…
A: Given information: EBIDTA $2.2 million Growth rate is 5% Tax rate is 35% Depreciation $210,000…
Q: LMN Corporation has projected that their performance for the next five years will result to the…
A: Useful life is 10 years CAPEX is P1million Orginal purchase price is P5million Tax rate is 30%…
Q: Cathey Corporation currently has sales of $1,000, which are expectedto grow by 10% from Year 0 to…
A: Free cash flow (FCF) is the cash available for distribution to the shareholders. It is the cash left…
Q: Dewey Corp. is expected to have an EBIT of $2,850,000 next year. Depreciation, the increase in net…
A: Company's stock :- A stock (also referred to as equity) is a type of security that represents…
Q: Gilmore Limited has the following projected equity cash flows (FCFE) and enterprise free cash flows…
A: a) Cost of equity (i) = 12% Value of equity = FCFE1/(1+i) + FCFE2/(1+i)^2 + ..... + FCFE5/(1+i)^5 +…
Q: Derry Corporation is expected to have an EBIT of $3,400,000 next year. Increases in depreciation,…
A: Time value of money: The time value of money is the idea that the value of money received today will…
Q: An investor has estimated that next year's sales for Pagoda Hotel will be RM100 million. Pagoda…
A: To find: Share price after two years.
The company XYZ S.A. has the following assets:
Stocks: Expect to receive cash dividends of $ 750 annually indefinitely. Required yield: 8%
Land: expected to sell for $ 235,000 within 6 years. Required yield 9%
Machinery: Expect to receive a
Calculate the value of each asset with the basic valuation model.
Step by step
Solved in 2 steps
- Gumtree Ltd will invest in an asset that is currently trading at $171,000. This is expected to generate a quarterly cash flow that grows at a constant rate of 6% p.a. compounded quarterly forever. The expected cost of capital is 10%p.a. compounded annually. How much would the first cash flow be from such an asset? Group of answer choices a. $1,107.52 b. $1,789.65 с. $1,558.44 d. $1,324.61 e. $1,961.37Beyer Company is considering the purchase of an asset for $180,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 10% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $ 60,000 $ 40,000 $ 70,000 $ 125,000 $ 35,000 $ 330,000 a. Compute the net present value of this investment. (Round your answers to the nearest whole dollar.) b. Should Beyer accept the investment? Yes NoBeyer Company is considering the purchase of an asset for $205,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 9% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $ 74,000 $ 59,000 $ 100,000 $ 166,000 $ 54,000 $ 453,000 a. Compute the net present value of this investment.b. Should Beyer accept the investment? Compute the net present value of this investment. (Round your answers to the nearest whole dollar.)
- Pena Company is considering an investment of $21,705 that provides net cash flows of $6,700 annually for four years. (a) If Pena Company requires a 7% return on its investments, what is the net present value of this investment? (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) Based on net present value, should Pena Company make this investment? Complete this question by entering your answers in the tabs below. Required A Required B What is the net present value of this investment? Years 1-4 Initial investment Net present value Net Cash Flows 6,700 x PV Factor Required A Present Value of Net Cash Flows 0 21,705 Required B >Pena Company is considering an investment of $30,455 that provides net cash flows of $9,400 annually for four years. (a) If Pena Company requires a 7% return on its investments, what is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) Based on net present value, should Pena Company make this investment? Complete this question by entering your answers in the tabs below. Required A Required B What is the net present value of this investment? Years 1-4 Net present value Net Cash Flows X PV FactorBeyer Company is considering the purchase of an asset for $180,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows . $60,000 $40,000 $70,000 $125,000 $35,000 $330,000 assume that Beyer requires a 10% return on its investments. Compute the net present value of this investment. (Round to the nearest dollar.) Should Beyer accept the investment?
- Pena Company is considering an investment of $27,215 that provides net cash flows of $8,400 annually for four years.(a) If Pena Company requires a 8% return on its investments, what is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)(b) Based on net present value, should Pena Company make this investment?Pena Company is considering an investment of $30,485 that provides net cash flows of $9,000 annually for four years. (a) If Pena Company requires a 6% return on its investments, what is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) Based on net present value, should Pena Company make this investment? Complete this question by entering your answers in the tabs below. Required A What is the net present value of this investment? Years 1-4 Required B Net present value Net Cash Flows X PV Factor Present Value of Net Cash Flows S 0 Required B >You are evaluating a prospective LBO investment and determine that the Year 5 free cash flow (FCF) estimate is $850 million. Additionally, based on related work you estimate that the appropriate discount rate is 8.5% and the long term growth rate is 3.5%. Based on the perpetuity growth method, the Terminal Value of the company is _________ in Year Group of answer choices a. $17.6 bn, year 5 b. $17.0 bn, year 6 c. $10.0 bn, year 5 d. $17.6 bn, year 6
- Beyer Company's is considering the purchase of an asset for $205,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 12% return on invetsments. (PV of $1, FV of $1, PVA of $1, and FVA of $1. Net cash flows (Year 1 $70,000, Year 2 $50,000. Year 3 $88,000, Year 4 $159,000 and Year 5 $53,000. A. Compute the net present value of this investment B. Should Beyer accept the investment?Given the following information regarding an income-producing property, determine the NPV using levered cash flows in your analysis: required equity investment: $240,000; expected NOI for each of the next five years: $139,000; debt service for each of the next five years: $105,000; expected holding period: five years; required yield on levered cash flows: 16%; expected sale price at end of year 5: $1,900,000; expected cost of sale: $120,000; expected mortgage balance at the time of sale: $1,400,000. Using Excel1LMN Corporation has projected that their performance for the next five years will result to the following (see table below). The corporation owns a property originally acquired at P5 million with useful life of 10 years. The terminal value was assumed based on the growth rate of the cash flows. Capital investment is needed on Year 1 amounting to P1 million. Income tax rate is at 30%. The required rate of return for this business is 12%. Calculate the maximum price at which an investor will purchase 40% of LMN Corporation (round the growth rate to four decimal point).