Answer:
Enrique
a) Accounting profit = $114
b) Economic profit (loss) = ($136)
Explanation:
a) Data and Calculations:
Monthly Rent = $1,600
Cost price of flowers = $2 per bunch
Selling price of flowers = $3 per bunch
Operations are for 7 days (8 hours daily) = 56 hours
Quantity of flowers sold per day = 100 bunches
Quantity of flowers sold per week = 700 (100 * 7)
Employee hours = 5 * 3 + 2 * 8 = 31 hours
Hours worked by Enrique = 25 (56 - 31)
Employee wages = $186 ($6 * 31)
Opportunity cost: Enrique = 25 * $10 = $250 per week
Accounting profit:
Sales revenue ($3 * 700) = $2,100
Cost of sales ($2 * 700) = 1,400
Gross profit $700
Expenses:
Rent ($1,600/4) = 400
Employee wages = 186 586
Accounting profit = $114
Economic profit:
Accounting profit $114
Opportunity cost 250
Economic loss = $136
Terminal EV = EV/EBITDA X EBITDA value of final year of forecast.
<h3>What is EBITDA?</h3>
EV stands for Enterprise Value and is the numerator in the EV/EBITDA ratio. A firm’s EV is equal to its equity value plus its debt less any cash debt less cash is referred to as net debt. In finance, the terminal value of a security is the present value at a future point in time of all future cash flows when we expect stable growth rate forever. The perpetual growth method of calculating a terminal value formula is the preferred method among academics as it has a mathematical theory behind it. This method assumes the business will continue to generate Free Cash Flow (FCF) at a normalized state forever. The exit multiple approach is more common among industry professionals, as they prefer to compare the value of something they can observe in the market.
The correct answer is option A.
Learn more about EBITDA, refer:
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Answer:
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Explanation:
yes
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Answer:
Average receivables = $157,500,000
Explanation:
<em>Account receivable represent the amount of credit made by a business which remain uncollected as at the reporting date. In other words, they represent the amount that customers are owing the business in respect of credit sales.</em>
Average account receivables
=(opening balance + closing balance)/2
=( $142,650,000 + $172,350,000)/2
= 157,500,000.