What percentage the terminal value contributes

Assignment Help Accounting Basics
Reference no: EM133022937

Question - Using the following set of parameters:

Gross Margin 40%

Fixed Costs $2,000

Revenue Growth Rate for Years 1 to 5 10%

FCF Steady Growth 3%

Discount Rate 12%

Year 1 Revenue $5,000

Tax Rate 21%

Terminal Year 5

Required - What percentage the terminal value contributes to the total enterprise value? How sensitive is your valuation to inputs?

Reference no: EM133022937

Questions Cloud

Calculate the project-specific cost of equity : The risk-free rate of return is 5% per year and the equity risk premium is 7% per year. Calculate the project-specific cost of equity
Find the cost of capital : A firm issued 10,000, 10% debentures of Rs,. 10 each at a premium of .5% with a maturity period of 20 years. The tax rate is 50%. Find the cost of capital
What is meant by breakeven drivers : What is meant by breakeven drivers? Identify two important drivers affecting the amount of revenue needed for ventures to break even
Calculate the contribution margin ratio : Sarasota, Inc. produces stereo speakers. The selling price per pair of speakers is $1,000. Calculate the contribution margin ratio
What percentage the terminal value contributes : Required - What percentage the terminal value contributes to the total enterprise value? How sensitive is your valuation to inputs
Determine the dollar value of the annual bond premium : Baltimore uses the straight-line method for amortization. Use this information to determine the dollar value of the annual bond premium amortization
What weight should it use for debt : If the company has a $78.6 million market value of equity, what weight should it use for debt when calculating the cost of capital
What is the present value : What is the present value of $300 received at the beginning of each year for five years? Assume that the first payment is not received until the beginning
Calculate the average of the conditional expectations : Calculate the average of the conditional expectations computed over all 10,000 iterations of the "for loop".

Reviews

Write a Review

Accounting Basics Questions & Answers

  Describe the consequence of capital rationing

Discuss the trade-off between more competition among parts of an organization as a consequence of capital rationing and the perceived benefits.

  Review case related to magnetic resonance imaging facility

(Analyzing transactions on a work sheet) Dr. Harlan Elliott opened a magnetic resonance imaging (MRI) facility, to be known as Harlan MRI.

  What the net cost of rico merchandise purchases is

RiCo uses the perpetual method for inventory and records purchases at gross. What the net cost of RiCo's 20X4 merchandise purchases is

  Business process models and strategy analysis

A series of Business Process Models, which capture the existing and proposed business processes. The models should follow the BPMN notation (see Introduction to BPMN in Unit 4's Resources). It is recommended that you use Microsoft Visio to create ..

  Discuss income tax do black and george pay

how much total combined income tax do Black and George pay in the current year

  A fully depreciated asset for its salvage value

Jim Reed manages a fleet of utility trucks for a rural county government. He's been in his job 30 years, and he knows where the angles are. He makes sure that when new trucks are purchased, the salvage value is set as low as possible.

  Calculate the internal rate of return

Kamila Company is considering whether to invest in a piece of equipment that requires an investment of $40,000 today. Calculate the internal rate of return

  How much is cost of goods sold

On December 31, 2015, XYZ Inc. has a balance in the Finished Goods Inventory account of $50,000. How much is cost of goods sold

  Journalize the adjusting entry

1. Journalize the transactions. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: 3. Product warranty cost, $26,800.

  Determine if the system for internal controls is effective

Sampson conducts a periodic review of the organization's accounting records in order to determine if the system for internal controls is effective.

  Create a supplier performance improvement plan

You have been struggling with the supplier of roofing nails for several months and you are fast approaching the peak roofing season.

  Prepare all of the relevant journal entries

Prepare all of the relevant journal entries from the time of sale until the date indicated. (Assume that no reversing entries were made.)

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