3) (3 pts) Company A has $60 million in assets and generates $95 million in sales. Company B has $310 million in assets and generates $570 million in sales Everything else equal, which company is "better" and how do you know? 4) (3 pts) Company X generates $90 million in sales and has $5 million in Net Income Company Y generates $410 million in sales and has $13 million in Net Income 2019 Everything else equal, which company is "better" and how do you know? 5) (6 pts) Bob's best guess is that investment A will be worth $98. in four years. In his opinion, it could be worth a little more or it could be worth a little less, so Bob assigns a discount rate of 9% per year to this investment. Carol's best guess is that Investment A will be worth $109 in four years. In her opinion, it could be worth a little more or it could be worth a little less, so Carol assigns a discount rate of 9% to this investment. 10 F 6 . ento94 1+r7o What is Bob's Intrinsic Valuation of Investment ? What is Carol's Intrinsic Valuation of Investment A? 7 7.21 - CM Clog If Investment A currently sells for $79, would Bob consider buying Investment A? (Yes or No) _Po If Investment A currently sells for $79, would Carol consider buying Investment A? (Yes or No) Yes TV 6) (3 pts) What is the present value of a perpetuity that pays $4.00 per year forever (at the end of every year) if the appropriate discount rate is 7%? PV=S 57.14 Discount 3) (3 pts) Company A has $60 million in assets and generates $95 million in sales. Company B has $310 million in assets and generates $570 million in sales Everything else equal, which company is "better" and how do you know? 4) (3 pts) Company X generates $90 million in sales and has $5 million in Net Income Company Y generates $410 million in sales and has $13 million in Net Income 2019 Everything else equal, which company is "better" and how do you know? 5) (6 pts) Bob's best guess is that investment A will be worth $98. in four years. In his opinion, it could be worth a little more or it could be worth a little less, so Bob assigns a discount rate of 9% per year to this investment. Carol's best guess is that Investment A will be worth $109 in four years. In her opinion, it could be worth a little more or it could be worth a little less, so Carol assigns a discount rate of 9% to this investment. 10 F 6 . ento94 1+r7o What is Bob's Intrinsic Valuation of Investment ? What is Carol's Intrinsic Valuation of Investment A? 7 7.21 - CM Clog If Investment A currently sells for $79, would Bob consider buying Investment A? (Yes or No) _Po If Investment A currently sells for $79, would Carol consider buying Investment A? (Yes or No) Yes TV 6) (3 pts) What is the present value of a perpetuity that pays $4.00 per year forever (at the end of every year) if the appropriate discount rate is 7%? PV=S 57.14 Discount
