7) Compared to a publicly traded firm, a comparable private firm is thought to be: A) 20% to 30% less valuable. B) less liquid for the owners. C) more difficult to accurately value D) all of the above 8) Which of the following statements regarding firms and value is NOT true? A) We can create value by taking on negative net present value projects B) Shareholder control in and of itself has value C) Value is ultimately what someone is willing to pay for a firm D) It is important to know what is being valued, the assets or the equity in a firm 9) Which of the following equations for the Book value Plus Adjustment method is correct? A) Value of equity (VE) - market value of equity - adjustments B) Value of equity (VE) - book value of equity + adjustments C) Value of equity (VE) - book value of equity-adjustments D) Value of equity (VE) market value of equity + adjustments Liabilities Accounts Payable S100.000 Figure 13-1 Bestor Travel Inc. Balance Sheet Assets Cash $40,000 Inventory $220.000 Patent $60.000 Property (at cost) $550.000 Plant and Equipment (net) $430,000 Total Assets $1.300.000 Equit 1.200.000 Total Liabilities and Equit51.300.000 Suppose you were fortunate on the timing of your property investment and the firm's property is now worth $750,000. An investor has offered you $100,000 for the patent. Further, some of the firm's inventory has become obsolete and is now worth only $180,000. 10) Bestor Travel, Inc manufactures and sells high quality light weight luggage highly prized in the market for its style and durability. Use the information from Figure 13-1 and the Book value Plus Adjustment method to value the firm's equity. A) $1,100,000 B) $1.200,000 C) $1.300.000 D) $1,400.000 11) Assume the information in Figure 13-1 is correct, EXCEPT the market value of property is now estimated to be $450,000. Use the Book value Plus Adjustment method along with the information from 13-1 and the new estimated value of property to value the firm's equity A) $1,100,000 B) $1,200,000 C) $1,300,000 D) $1,400,000 7) Compared to a publicly traded firm, a comparable private firm is thought to be: A) 20% to 30% less valuable. B) less liquid for the owners. C) more difficult to accurately value D) all of the above 8) Which of the following statements regarding firms and value is NOT true? A) We can create value by taking on negative net present value projects B) Shareholder control in and of itself has value C) Value is ultimately what someone is willing to pay for a firm D) It is important to know what is being valued, the assets or the equity in a firm 9) Which of the following equations for the Book value Plus Adjustment method is correct? A) Value of equity (VE) - market value of equity - adjustments B) Value of equity (VE) - book value of equity + adjustments C) Value of equity (VE) - book value of equity-adjustments D) Value of equity (VE) market value of equity + adjustments Liabilities Accounts Payable S100.000 Figure 13-1 Bestor Travel Inc. Balance Sheet Assets Cash $40,000 Inventory $220.000 Patent $60.000 Property (at cost) $550.000 Plant and Equipment (net) $430,000 Total Assets $1.300.000 Equit 1.200.000 Total Liabilities and Equit51.300.000 Suppose you were fortunate on the timing of your property investment and the firm's property is now worth $750,000. An investor has offered you $100,000 for the patent. Further, some of the firm's inventory has become obsolete and is now worth only $180,000. 10) Bestor Travel, Inc manufactures and sells high quality light weight luggage highly prized in the market for its style and durability. Use the information from Figure 13-1 and the Book value Plus Adjustment method to value the firm's equity. A) $1,100,000 B) $1.200,000 C) $1.300.000 D) $1,400.000 11) Assume the information in Figure 13-1 is correct, EXCEPT the market value of property is now estimated to be $450,000. Use the Book value Plus Adjustment method along with the information from 13-1 and the new estimated value of property to value the firm's equity A) $1,100,000 B) $1,200,000 C) $1,300,000 D) $1,400,000