Answer to Q1 was $52,000. need help on 2-5
Question 1 (0.4 points) Previously correct Munich Exports Corporation 2019 2020 Cash $50,000 $50,000 Accounts 200,000 300,000 receivable Inventories 450,000 570 DO Total current 700,000 920,000 assets Fixed assets, 300,000 380,000 net Total assets $1,000,000 $1,300,000 Accounts 130,000 $180,000 payable Accruals 50,000 70,000 Bank loan 90,000 90,000 Total current 270,000 340,000 liabilities Long-term 400,000 550,000 debt Common stock ($.05 50,000 50,000 par) Additional 200,000 200,000 paid-in-capital Retained 80,000 earnings 160,000 Total liabilities and equity $1,000,000 $1,300,000 2019 2020 Net sales $1,300,000 $1,600,000 Cost of goods 780,000 960,000 sold Gross profit 520,000 640,000 Marketing 130,000 160,000 General and administrative 150,000 150,000 Depreciation 40,000 55,000 EBIT 200,000 275,000 Interest 45,000 55,000 Earnings 155,000 220,000 before taxes Income taxes 88,000 (40% rate) Net income $93,000 $132,000 Assume that the cash account includes only required cash. Determine the dollar amount of equity valuation cash flow (pseudo dividend) for 2020. 62,000 A Question 2 (0.4 points) Retake question Use question#1 inputs here. Cash flows are expected to grow at a perpetual 6 percent annual rate beginning in 2021. Assume that all cash is required cash as was done in Part A. What is the Global Products venture's present value if investors want an annual rate of return of 25 percent? No commas and round by two decimal places. Questions 3-5. The TecOne Corporation is about to begin producing and selling its prototype product. Annual cash flows for the next five years are forecasted as: Year 1 = -$50,000, Year 2 - - $20,000, Year 3 = $100,000, Year 4 = $400,000, and Year 5 = $800,000. Assume annual cash flows are expected to remain at the $800,000 level after Year 5 (i.e., Year 6 and thereafter). Recall from Chapter 7 that venture investors often use different discount rates when valuing ventures at various stages of their life cycles. For example, target discount rates by life cycle stage are development stage, 50 percent; startup stage. 40 percent; survival stage, 35 percent; and early rapid-growth stage, 30 percent. As ventures move from their late rapid- growth stages and into their maturity stages, a 20 percent discount rate is often used. If TecOne is at startup stage, calculate the venture's present value. No commas, round by one decimal place. A Question 4 (0.4 points) Retake question Now assume that the Year 6 cash flows are forecasted to be $900,000 in the stepping stone year and are expected to grow at an 6 percent compound annual rate thereafter. Assuming that the TecOne is at startup stage, calculate the venture's present value. Round it, no decimal places. A Question 5 (0.4 points) Retake question Now extend Q#4 one step further. Assume that the TecOne will switch from startup stage to their maturity stage beginning in Year 6 to reflect a drop in operating or business risk. Calculate the venture's present value. No commas, round it and no decimal places Question 1 (0.4 points) Previously correct Munich Exports Corporation 2019 2020 Cash $50,000 $50,000 Accounts 200,000 300,000 receivable Inventories 450,000 570 DO Total current 700,000 920,000 assets Fixed assets, 300,000 380,000 net Total assets $1,000,000 $1,300,000 Accounts 130,000 $180,000 payable Accruals 50,000 70,000 Bank loan 90,000 90,000 Total current 270,000 340,000 liabilities Long-term 400,000 550,000 debt Common stock ($.05 50,000 50,000 par) Additional 200,000 200,000 paid-in-capital Retained 80,000 earnings 160,000 Total liabilities and equity $1,000,000 $1,300,000 2019 2020 Net sales $1,300,000 $1,600,000 Cost of goods 780,000 960,000 sold Gross profit 520,000 640,000 Marketing 130,000 160,000 General and administrative 150,000 150,000 Depreciation 40,000 55,000 EBIT 200,000 275,000 Interest 45,000 55,000 Earnings 155,000 220,000 before taxes Income taxes 88,000 (40% rate) Net income $93,000 $132,000 Assume that the cash account includes only required cash. Determine the dollar amount of equity valuation cash flow (pseudo dividend) for 2020. 62,000 A Question 2 (0.4 points) Retake question Use question#1 inputs here. Cash flows are expected to grow at a perpetual 6 percent annual rate beginning in 2021. Assume that all cash is required cash as was done in Part A. What is the Global Products venture's present value if investors want an annual rate of return of 25 percent? No commas and round by two decimal places. Questions 3-5. The TecOne Corporation is about to begin producing and selling its prototype product. Annual cash flows for the next five years are forecasted as: Year 1 = -$50,000, Year 2 - - $20,000, Year 3 = $100,000, Year 4 = $400,000, and Year 5 = $800,000. Assume annual cash flows are expected to remain at the $800,000 level after Year 5 (i.e., Year 6 and thereafter). Recall from Chapter 7 that venture investors often use different discount rates when valuing ventures at various stages of their life cycles. For example, target discount rates by life cycle stage are development stage, 50 percent; startup stage. 40 percent; survival stage, 35 percent; and early rapid-growth stage, 30 percent. As ventures move from their late rapid- growth stages and into their maturity stages, a 20 percent discount rate is often used. If TecOne is at startup stage, calculate the venture's present value. No commas, round by one decimal place. A Question 4 (0.4 points) Retake question Now assume that the Year 6 cash flows are forecasted to be $900,000 in the stepping stone year and are expected to grow at an 6 percent compound annual rate thereafter. Assuming that the TecOne is at startup stage, calculate the venture's present value. Round it, no decimal places. A Question 5 (0.4 points) Retake question Now extend Q#4 one step further. Assume that the TecOne will switch from startup stage to their maturity stage beginning in Year 6 to reflect a drop in operating or business risk. Calculate the venture's present value. No commas, round it and no decimal places
