Cookie Inc wanted to open up a few cookie shops around Oahu. . . Each location...

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Cookie Inc wanted to open up a few cookie shops around Oahu. . . Each location costs $214,000 They plan to start 1 at the beginning of year 1, 5 more locations at the start of year 2, and 4 more at the start of year 4 to spread out the work. Each location brings in profits of $494,000 per year They plan to sell everything in 5 years and they think they could sell them for $16,500 each at that time. Assume a discount rate of 8%. Assume each location depreciates $19,800 per year. What would the business be worth today using the Abnormal Earnings Model? # of Locations Year 1 1 Year 2 5 Year 3 0 Year 4 4 Year 5 0 Net cash flows from operations 299,800 2,012,800 3,082,800 4,282,000 5,303,000 Depreciation Net Income 19,800 260,200 118,800 1,775,200 118,800 2,845,200 198,000 3,886,000 198,000 4,907,000 Cash flows from operations 260,200 1,775,200 2,845,200 3,886,000 4,907,000 Cash flow from selling Cookie Inc wanted to open up a few cookie shops around Oahu. . . Each location costs $214,000 They plan to start 1 at the beginning of year 1, 5 more locations at the start of year 2, and 4 more at the start of year 4 to spread out the work. Each location brings in profits of $494,000 per year They plan to sell everything in 5 years and they think they could sell them for $16,500 each at that time. Assume a discount rate of 8%. Assume each location depreciates $19,800 per year. What would the business be worth today using the Abnormal Earnings Model? # of Locations Year 1 1 Year 2 5 Year 3 0 Year 4 4 Year 5 0 Net cash flows from operations 299,800 2,012,800 3,082,800 4,282,000 5,303,000 Depreciation Net Income 19,800 260,200 118,800 1,775,200 118,800 2,845,200 198,000 3,886,000 198,000 4,907,000 Cash flows from operations 260,200 1,775,200 2,845,200 3,886,000 4,907,000 Cash flow from selling