Ellis Manufacturing Inc has estimated FCFF for each of the next five years and believes that subsequent cash flows will grow at a constant annual rate of 3% indefinitely
If FCFF are $4,500,000 in year five, and the cost of capital is 9%, what is the value in year five of these terminal value cash flows?
A) $50,207,200
B) $75,000,000
C) $77,250,000
D) There is not enough information to answer this question.
C
Explanation: C) FV5 = CF6/(r - g) = $4,500,000(1.03 )/(.09 -.03 ) = $77,250,000.
You might also like to view...
The output of the detailed design phase of the Systems Development Life Cycle (SDLC) is a
a. fully documented system report b. systems selection report c. detailed design report d. systems analysis report
Among the five essential customer requirements that encompass _______ are the breadth and depth of products and services in a supplier's market offering, the availability of those products and services at supplier warehouses and/or showrooms,
timing and reliability of delivery, installation, and payment terms and conditions. a. total customer experience (TCE) b. business channel management c. immediacy of fulfillment d. value-added management
Explain the market force of "threat of entry," as detailed by Porter's Five Forces model, with an example
What will be an ideal response?
________ refer to the formal documents that must be filed at the secretary of state's office of the state of organization of an LLC (limited liability company) to form the LLC
A) Operating agreements B) Certificates of interest C) Articles of organization D) Articles of amendment