Question: please fill correctly. 1. Organic Micros was established 8 years ago by Mary Mendoza. The firm reported EBIT this year of $80,000. Mary typically reports

1. Organic Micros was established 8 years ago by Mary Mendoza. The firm reported EBIT this year of $80,000. Mary typically reports about $2,000 in personal expenses through the firm each year. She also pays herself a salary of $60,000 despite the market rate for such a position being closer to $30,000. 2. The firm currently reports $10,000 in depreciation expenses every year. 3. The firm will need $25,000 of inventory replaced in year 1 and will also require the replacement of equipment during year 4 in an amount totaling $50,000. 4. The firm currently has outstanding debt of $400,000. The firm has been historically financed in a way that 30% of funds are a result of debt financing. The cost of this debt financing is estimated to be 12% while the cost of equity financing is estimated at 22%. 5. Mary originally invested $120,000 of her own funds in the firm which establishes a cost basis for the firm of $120,000. Mary typically falls in a tax bracket that results in a total tax rate of 40%. 6. Based on the firm's maturity and the state of the industry, it is estimated the EBIT will increase by 9% each year for the next 5 years. Beyond this time frame, a reasonable estimate of growth is neither possible nor relevant. 11 \begin{tabular}{|ll|l|} \hline 12 & Current EBIT & \\ 13 & Owner's Salary & \\ 14 & Reasonable Salary & \\ 15 & Depreciation & \\ 16 & Personal Expenses & \\ 17 & New Equipment & \\ 18 & Inventory Investment & \\ 19 & Estimated Growth Rate & \\ 20 & Tax Rate & \\ \hline \end{tabular} 21 \begin{tabular}{|ll|l|} \hline 22 & Terminal Value & \\ 23 & CF1 & \\ 24 & CF2 & \\ 25 & CF3 & \\ 26 & CF4 & \\ 27 & CF5 & \\ 28 & NPV & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Weight Of Debt & \\ \hline Weight Of Equity & \\ \hline Cost Of Debt & \\ \hline Cost Of Equity & \\ \hline WACC & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Value Of Firm & \\ \hline Basis Of Firm & \\ \hline Gain & \\ \hline Taxes Owed & \\ \hline Value Of Debt & \\ \hline Net Proceeds & \\ \hline Sell For $900k? & \\ \hline Sell For $700k? & \\ \hline \end{tabular}
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