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Afina-wow [57]
3 years ago
15

Assume Company X had an 80,000 EBITDA in 2019 and its EBITDA is expected to grow by 4% per year. The company has no excess cash

or marketable securities and does not project to have any excess cash or marketable securities in the future. The company has learned from its investment banker that its EBITDA multiple for purposes of arriving at its enterprise value is 14 and this EBITDA multiple is not projected to change in the future.
Using the company’s projected 2022 EBITDA and the EBITDA multiple approach to arrive at a year-end 2022 valuation, what is the company’s projected 2022 enterprise value and what is its projected total value? You may want to refer to the March 4 lecture on valuations using EBITDA as posted on Blackboard Learn.

Answer this financial planning and analysis problem:

A firm has a product with $200,000 in annual sales. Management is considering two different pricing alternatives for this product for next year.
Alternative one is to not change the price of this product next year. The expected result would be 5% sales growth and a 30% gross margin.
Alternative two is to increase the price of this product by 5% next year. The expected result would be 1% sales growth and a 33.3% gross margin.

Based on these expected results, which would you recommend? What is next year’s expected gross profit in each case?
Business
1 answer:
yan [13]3 years ago
3 0

<u>Solution and Explanation:</u>

1….                                            2019  2020  2021 2022

EBITDA                              80000  83200  86528  89989

EBITDA Multiple                            14     14               14  14

Enterprise or Total Value

= EBITDA*Multiple             1120000  1164800  1211392  1259848    

2012 Enterprise/Total Value =  1259848

2…Next year's expected gross margin

<u>Alternative :1 </u>

Gross Margin= (200000 * 1.05) * 30 \%=63000

<u>Alternative :2 </u>

Gross Margin= (200000 * 1.01) * 33.3 \%=67266

Alternative 2 is recommended   as there Increase in price is 1% . But increase in gross margin is 3.3%

Next year’s expected gross margin in dollars in each case

Alternative :1------------ 63000

Alternative :2------------67266

 

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Determine whether each of the following examples would be included in Gross Domestic Product (GDP). a. When Judy went to the gro
svetlana [45]

Answer:

Items included in GDP

Judy's purchase of potatoes

The purchase of the two fighter jets

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports  

Items not included in the calculation off GDP includes:  

1. services not rendered to oneself

2. Activities not reported to the government  

3. illegal activities

4. sale or purchase of used products

5. sale or purchase of intermediate products

Judy's purchase would be included as part of consumption spending by households on non durable items.

The purchase of the tires would not be included in the calculation of GDP because the tires are intermediate goods. Only final goods are included in the purchase of GDP

The purchase of the two fighter jets would be included in GDP as part of government spending

the $100 gift would not be included in the calculation of GDP  

3 0
3 years ago
contains funds you have in your bank checking account as travelers' checks and the currency in circulation in the economy.
Marysya12 [62]

<u> M1 </u> contains funds you have in your bank checking account as travelers' checks and the currency in circulation in the economy.

<h3><u>What exactly is M1?</u></h3>

Currency, demand deposits, and other liquid deposits, such as savings accounts, make up M1, which is the money supply. Due to the fact that M1 contains assets and currencies that are either already cash or can be swiftly changed into cash, it is the most liquid element of the money supply. M2 and M3's "near money" and "near, near money," which fall under these categories, cannot, however, be changed to money as rapidly.

<u>How to Determine M1?</u>

The coins and notes of the Federal Reserve that are in circulation outside of the vaults of depository institutions and the Federal Reserve Banks make up the M1 money supply, also known as bills or paper money. The mainstay of a country's monetary system is paper money.

M1 also comprises demand deposits, other checkable deposits (OCDs), traveler's checks (issued by non-banks), NOW accounts at depository institutions, and credit union share draft accounts.

M1 covers securities that are easily redeemable and in circulation for the majority of central banks. However, the term varies a little bit depending on where you are.

Learn more about M1 with the help of the given link:

brainly.com/question/15584887

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3 0
2 years ago
Which of the following is not a type of bank? A. Credit Union B. Online Bank C. Payday Lender D. Retail Bank
brilliants [131]

The answer from given choice is "C", "Payday Lender" is not a type of bank.<span>

Payday lender involve the basic loan procedure where a lender is providing a short-term loan which has to be paid back when the borrower's next payday come, that is a simple loan process which has nothing to do with a bank.</span>

7 0
3 years ago
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Superior Company has provided you with the following information before any year-end adjustments: Net credit sales are $131,750.
aleksklad [387]

Answer:

$3,553

Explanation:

Credit losses = Net credit sales × Historical percentage of credit losses

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5 0
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mario62 [17]

The correct answer is E; job structure and pay level.

Further Explanation:

Each company has different jobs and pay for their employees. Many workers start a job at entry level positions and will rise higher in the company the more time they are there.

Each job will pay differently and each job will have different levels of pay. This is how the pay structure is established in large companies. State and Federal government jobs always operate on a pay structure such as this.

Learn more about pay structure at brainly.com/question/5044592

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