"Eastern Corporation has $21,000,000 in equipment that has a 15 year class life. The equipment is 8 years old. Eastern is sellin
g the equipment for $10,000,000. Eastern uses simplified straight line depreciation (zero salvage value) and has a marginal tax rate of 34%. What is the terminal cash flow? Assume no working capital."
The answer is net income Net income is the amount of capital that the Company's made during an operational year after all relevant expenses have already been deducted. Some amount of the net income will be shared to shareholders according to the percentage, and some of it will be put in company's capital to expand the operation.
According to my research on different business strategies, I can say that based on the information provided within the question Entrepreneurs purchasing such a license are engaging in franchising. This is when the owner of a brand licenses the name to a specific individual so that individual can open up his/her own store using that name and reputation. These licenses come with certain requirements placed by the owner of the brand that the buyer must follow.
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