User Account

All Pages

What is the terminal value as of year five

Assignment Help Accounting Basics
Reference no: EM133049972

Question - ABC Software is considering starting a new division making phone apps. It has prepared the following - five-year forecast of free cash flows for this division.

 

1

2

3

4

5

Free Cash Flows

69,000

20,000

24,000

83,000

215,000

Assume that the cash flows after year 5 will grow at 1% per year, forever. The discount rate for this division is 8%.

Required - What is the terminal value as of year 5 (i.e., the value of all future cash flows starting in year 6)?

Reference no: EM133049972

Questions Cloud

How is risk assessed in health care organizations today : -How is risk assessed in health care organizations today? What role does evidence-based design have in the risk assessment/planning process?
What is the risk premium on the market : The Treasury bill rate is 4.5%, and the expected return on the market portfolio is 10.9% the capital asset pricing model. What is the risk premium on the market
Implementing organizational change : It is important for organizations to adjust their businesses to address the needs of the marketplace to survive the change. In today's dynamic business environm
Role in searching for potential job candidates : How do you feel about social media playing a role in searching for potential job candidates?
What is the terminal value as of year five : Assume that the cash flows after year 5 will grow at 1% per year, forever. The discount rate for this division is 8%. What is the terminal value as of year five
Explain primary conflict-handling style : Conflict in organizations is not only inevitable but is also a key driver for positive change and innovation. If everyone remained at ease with the status quo,
Concept of relationship quality : Describe the relationship between trust and commitment in the concept of relationship quality!
Explain whether a company can act as a political actor : Corporate accountability refers to whether a corporation is answerable in some way for the consequences of its actions". According to the statement please expla
Current safe work practices for a piece of equipment : Research the current safe work practices for a piece of equipment, a workplace system or process in your service.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Provide the necessary journal entries

During 2019 Gem Limited explores three areas and incurs the following costs: Provide the necessary journal entries using the area-of-interest method

  Deschambault inc is working on its cash budget for december

deschambault inc. is working on its cash budget for december. the budgeted beginning cash balance is 14000. budgeted

  Determine the estimated cost of inventory lost in the fire

Wildhorse's ending inventory at December 31 was destroyed in a fire. Using the gross profit rate, determine the estimated cost of inventory lost in fire

  Super sales company is the exclusive distributor for a

super sales company is the exclusive distributor for a revolutionary bookbag. the product sells for 60 per unit and has

  Securities available for sale of beale developments

At December 31, 2013, the investments in securities available for sale of Beale Developments were reported at $78 million:

  How much is the net cash flows

Operating expenses is PHP 50,000. The company incurred PHP 500 for interest. If the depreciation is PHP 5,000, how much is the net cash flows?

  What is the total value assigned to new piece of equipment

The new piece of equipment is expected to have a 10 year life and a salvage value of $15,000. What is the total value assigned to the new piece of equipment

  What is the amount and character of the gain canon

What is the amount and character of the gain Canon will recognize on the sale, assuming that it is a partnership

  What was the cost of goods sold what were the conversion

What was the cost of goods sold, What were the conversion costs, What were the prime costs, What were the period costs

  What is the carrying amount on the december

What is the carrying amount on the December 31, 2016 Balance Sheet for 4A. and 4B

  What adjustment would have been required

What adjustment would have been required for the retained earnings balance as of January 1, 2011

  The issuance of the note by quantum technology

1.On November 1, 2013, Quantum Technology, a geothermal energy supplier, borrowed $16 million cash to fund a geological survey.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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