What is appropriate price that paramount landscape services

Assignment Help Financial Management
Reference no: EM131185790

Paramount Landscape Services is considering the acquisition of Barker Gardens, Inc. Paramount's management team believes Barker can generate cash flows of $187,000, $220,000, and $245,000 over the next three years, respectively. After that time, they feel the business will be worthless. Paramount has determined that a 9.5 percent annual rate of return is applicable to this potential acquisition. Given this information, what is an appropriate price that Paramount Landscape Services should be willing to pay today to acquire Barker Gardens, Inc

Reference no: EM131185790

Questions Cloud

Discuss framework and controls which should be used a projet : Discuss frameworks (COBIT and COSO) and controls which should be used in a project such as the Queensland Health Payroll system
Fisher effect is defined as the relationship : The Fisher effect is defined as the relationship between which of the following variables?
Develop effective interpersonal : Develop effective interpersonal and written communication skills. Engage autonomously and cooperatively with others.
In the asset inventory : In the asset inventory ,we have asset groups such as information ,hardware,software,system center,building and campus.what are dependencies among asset groups considering asset values?how do you calculate the cumulative asset value of an asset in har..
What is appropriate price that paramount landscape services : Paramount Landscape Services is considering the acquisition of Barker Gardens, Inc. Paramount's management team believes Barker can generate cash flows of $187,000, $220,000, and $245,000 over the next three years, respectively. After that time, they..
The necessary tools to monitor project progress : Project Networking provides the necessary tools to monitor project progress. Considerable time and effort is expended developing successful project networks. Compute the project network sequence and proper timing to complete the project using an exce..
The yield curve for treasury securities is flat : Short Corp just issued bonds that will mature in 10 years, and Long Corp issued bonds that will mature in 20 years. Both bonds promise to pay a semiannual coupon, they are not callable or convertible, and they are equally liquid. Further assume that ..
What is the free cash flow for talker corp and mobiletalk : You are an industry analyst for the telecom sector. You are analyzing financial reports from two companies. Talker Corp. and MobileTalk, Inc. Corporate tax for both firms is 35%. What is the FREE CASH FLOW for Talker Corp? and What is the FREE CASH F..
What is current liability vs long term liability : how to correct errors in a bank reconciliation -what purpose does a bank reconciliation serve? -what is an NSF check and how is it reflected on a bank rec? what is a current liability vs. long term liability? given info for stock – how to calculate t..

Reviews

Write a Review

Financial Management Questions & Answers

  Bond issue on the market that matures

Acme Corporation has a bond issue on the market that matures in 19 years, each bond has a $1,000.00 par value and pays an annual coupon. The bonds currently sell for a price of $1,213 each. If the market rate (yield to maturity) on this issue is 9% w..

  What is the present value of his expected payoff

Your client is a biochemist who has discovered a technique to create a new biofuel. He estimates it will take him 2 years to make it economically feasible at a cost of $2,000,000. Assume that all of the costs incurred were capitalized as costs of the..

  Xyz has no debt financing and has a value of 45 million and

xyz has no debt financing and has a value of 45 million and ebit of 14.5 million. the firm is planning to change its

  Determine the size of the last payment

Land is purchased for $75,000. It is agreed for the land to be paid for over a 5 year period with annual payments and using 12% annual compound interest rate. Each payment is to be $3000 more than the previous payment. Determine the size of the last ..

  How large will your retirement account

You are planning to make monthly deposits of $330 into a retirement account that pays 8 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 25 years?

  Savings and loan offering an introductory rate

You receive a credit card application from Shady Banks Savings and Loan offering an introductory rate of 3.3 percent per year, compounded monthly for the first six months, increasing thereafter to 18.2 percent compounded monthly. Assuming you transfe..

  Stock prices and intrinsic values

Benjamin Graham, the father of value investing, once said, “In the short run, the market is a voting machine, but in the long run, the market is a weighing machine.” In this quote, Benjamin Graham was referring to the key difference between the “pric..

  What type of contract

When Gordon told Hanson that he was considering selling his house, Hanson offered to buy it. Gordon and Hanson entered into a contract in which Hanson paid Gordon $1,000 in cash for the right to buy Gordon's house for $150,000 in the event Gordon dec..

  Calculate the firms degree of operating leverage

Carolina Fastener, Inc., makes a patented marine bulkhead latch that wholesales for $6.12. Each latch has variable operating costs of $3.42. Fixed operating costs are $49,600 per year. Calculate Carolina Fastener's operating breakeven point. Calculat..

  Considering a project with an initial cost

You are considering a project with an initial cost of $7,800. What is the payback period for this project if the cash inflows are $1,100, $1,640, $3,800, and $4,500 a year over the next four years, respectively?

  Replacing the engines in their current fleet of mid capacity

The Urban Transport Company (UTC) in the city of Megopolis has been approached by a firm that has stated that by replacing the engines in their current fleet of mid capacity city buses with the engine built by the firm UTC will save over the 6 period..

  The relationship of this to individual and aggregate saving

What are the economic functions that financial intermediaries and markets perform that benefit society? In your answer, discuss the relationships of financial intermediaries and financial markets to the savings investment process within an economy an..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd