Question: Please read the question and explain. A. Please explain how to prepare a Mayfield Real Estate Development business valuation report. B. Please explain how to
Please read the question and explain.
A. Please explain how to prepare a Mayfield Real Estate Development business valuation report.
B. Please explain how to create an analysis for giving equal weights to the five years of earning data versus giving greater weight to the more recent earning periods (where five is more recent).
C. Given Mayfield Real Estate Development's type of industry, is 5 years of financial information sufficient to provide an accurate picture? Why?
Mayfield Real Estate Development is a company that owns and operates a number of real estate ventures. The company also engages in real estate acquisitions and sales of properties, some of which are properties the company no longer wishes to operate. Similar real estate firms earn a 15-percent rate of return. Mayfield reported the following earnings over the last five years:
| Year | Operating Income | Gain (Loss) on Sale of Assets | Net Income |
|---|---|---|---|
| 1 | $1,000,000 | $700,000 | $1,700,000 |
| 2 | $1,500,000 | $600,000 | $2,100,000 |
| 3 | $1,100,000 | $400,000 | $1,500,000 |
| 4 | $1,600,000 | (200,000) | $1,400,000 |
| 5 | $1,800,000 | (400,000) | $1,400,000 |
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