With the following information, calculate the after-tax cash flows from operations. Accounts Amounts Revenue.. $3,000,000 Finance costs

Question:

With the following information, calculate the after-tax cash flows from operations.

Accounts Amounts

Revenue………………………………….. $3,000,000

Finance costs …………………………….. 100,000

Income tax expense ……………………… 175,000

Cost of sales ……………………………… 1,800,000

Distribution costs ………………………… 400,000

Administrative expenses ………………… 300,000

Depreciation expense of $100,000 is included in distribution costs and depreciation expense of $200,000 is included in cost of sales.

1. Calculate the value of the business as a going concern by using the following capitalization rates: 10%, 20%, 30%, and 40%.

2. Use a 20% discount rate to calculate the present value of the business if it had a five-year lifespan and a ten-year lifespan.

3. If an investor were to invest $400,000 in the business, how much cash should the business generate each year during a 10-year period if the investor wants to earn 30%? Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...