Urgent help needed please

Calculate the Business Value using the Capitalized Cash Flow Method. If you use Excel to do your calculations you must transfer the values and the formulas used to calculate the values into the dialog box below.

16 marks

Winter Sports Inc. has the following Balance Sheet and Income Statement for 2020.

Cash $ 1,000 Accounts Payable $10,000

Marketable Securities 5,000 Note Payable 5,000

Accounts receivable 10,000

Shareholder Loan Receivable 2,000

Inventories 14,000

Total Current Assets $32,000 Total Liabilities $15,000

Equipment (cost - $30,000) 16,000 Common Stocks 3,000

- Retained Earnings 30,000

Total $48,000 Total $48,000

2020

Sales $200,000

Cost of Goods Sold 100,000

Gross Profit 100,000

Operating expenses 72,500

Depreciation 1,000

Interest Expense 500

Total Expenses 74,000

Income before Taxes 26,000

Income Taxes (40%) 4,800

Net Income $10,400

Other information:

The business does not have a business cycle 2020 is an average year.

The President (shareholder) has been paid a salary of $40,000 as he wanted to keep his income low for tax reasons but the market-rate for his services would have been $50,000.

Marketable Securities are surplus cash in excess of operational needs (FMV $5,000)

Shareholder Loan was made to the President to buy a car for his personal use.

Expected capital expenditures required in order to sustain operations is estimated to be $2,000 per year. CCA rate on capital assets acquired is 30%

The Undepreciated Capital Cost (UCC) balance on the existing assets is $20,000 and the CCA rate is 30%.

Company tax rate is 40%. Capital Gains are taxed at 50% and no capital losses allowed on depreciable property. WACC rate is 15%.

Based on Company's growth prospects, economic and market conditions, capitalization rate is judged to be WACC less 3%

Required: Assume the business will continue as a going concern, what is its Equity Value using the Capitalized Cash Flow method?