1. What is the difference between a book value balance sheet and a market value balance sheet? Which provides better information for management and investors?

2.Max Political Consultants Management, Inc. has decided to discontinue all of the firms business operations. The firm has a total of $7 million in debt and the fair market value of its assets is $10 million. The book value is $5 million. What will be the liquidating dividend the shareholders can expect to receive?

3. A few years ago, a friend of yours started a small business that develops gaming software. The company is doing well, and is valued at $1.5 million based on multiples for comparable public companies, after adjustments for their lack of marketability. With 300,000 shares outstanding, each share is estimated to be worth $5. Your friend, who has been serving as C.E.O. and C.T.O. (Chief Technology Officer), has decided that he lacks sufficient managerial skills to continue to build the company. He wants to sell his 160,000 shares and invest the money in an M.B.A. education. You believe you have the appropriate managerial skills to run the company. Would you pay $5 each for these shares? What are some of the factors you should consider in making this decision?

4. You have been approached by a friend who is starting a minor league baseball team in your city. He is seeking ten investors to put up $50,000 each. Expected net cash inflows over each of the next ten years are $350,000. You believe a proper discount rate for this investment is 20%. Should you make the investment?

5.

Use the following information to complete question:

Williams Tools Corp (Public Co)

Category	Value
Market Price Per Share	$12.25
Shares Outstanding	100 million
Debt	$600 million
EBITDA	$456 million
Net Income	$226 million

Siver Machinery Co.

Category	Value
Debt	$533 million
EBITDA	$250 million
Net Income	$96 million

Calculate the earnings per share and the price earnings ratio for Williams.

6..

Use the following information to complete question:

Williams Tools Corp (Public Co)

Category	Value
Market Price Per Share	$12.25
Shares Outstanding	200 million
Debt	$600 million
EBITDA	$456 million
Net Income	$226 million

Siver Machinery Co.

Category	Value
Debt	$533 million
EBITDA	$250 million
Net Income	$96 million

Compute the Enterprise/EBITDA Rate for Williams.