With the following information calculate the after tax cash flows from
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%?
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