DISCOUNTED CASH FLOW METHOD

(resources: Valuation Concepts and Methodology 2021 Edition by Marvin Lascano

Choose the letter of the correct answer.

1. Green Tea Corp. reported the following information: Revenue of Php 32,500, Operating Expenses of Php16,250. Included in the operating expense are salaries and wages of Php1,450, depreciation of Php500, and rentals of Php275. The interest expense incurred is Php200. How much is the EBITDA for the period?

a. Php16,750

b. Php16,250

c. Php16,550

d. Php14,025

2. Cornerstone Inc. reported revenue for the period amounting to Php75,200 and EBITDA Margin of 60%. How much is the operating expenses excluding depreciation?

a. Php75,200

b. Php45,120

c. Php30,080

d. Zero

3. Singapore Ltd. has reported Php125,000 revenue where their EBITDA Margin is 45%. If the taxes are 30% of the EBITDA, how much is the Net Cash Flows if the capital expenditure was purchased at Php1,500?

a. Php37,875

b. Php39,375

c. Php56,250

d. Php46,625

4. Malaysia Inc. purchased a capital expenditure amounting to Php1,500 and reported revenue of Php125,000 and operating expenses is Php50,000. The company incurred Php500 for interest. If the depreciation is Php5,000, how much is the Net Cash Flows? Tax Rate is 30%

a. Php75,000

b. Php57,650

c. Php52,150

d. Php56,150

5. Pawikan Corp. reported the following information

Year	Net Cash Flows
1	Php 250
2	Php 300
3	Php 350

How much is the net present value of Net Cash Flows, using discount rate of 10%

a. Php 300.12

b. Php 900.85

c. Php 738.17

d. Php 1,000

6. Dracaris inc. purchased an investment and expected to earn:

Year	Net Cash Flows
1	Php 250
2	Php 300
3	Php 450
TV	Php 900

Assuming a 10% discount factor, how much is the net present value based on the foregoing question, considering an additional investment is Php 1,000?

a. Php 489

b. Php 580

c. Php 1,000

d. Php 72,400

7. Lumus Corp. incurred business meetings expenses for the year amounting to Php65,200.00. The company assumes 5% inflation to all its expenses for the following year. The business meeting c. Php1,000 d. Php1,489 expenses for the following year is

a. Php65,200

b. Php68,460

c. Php70,000

d. Php72,400

8. Skywalker Inc. incurred office supplies expenses amounting to Php 22,680 and Php21,000 for the years 20x2 and 20x1, respectively. There is no change in the volume or quantity of the office supplies except prices. The inflation of office supplies is

a. 7.4%

b. 8%

c. 9%

d. 10%

9. Certified Inc. is developing its financial plan for the following year. In the current year, they are very certain that the volume to be sold is 750 units at Php125.00 per unit. Their operating profit margin is 40%, where depreciation is Php1,250. For purposes of valuation, they would like to get quickly determine their EBITDA.

Certified Inc is expecting a growth rate of 12%. They will not increase their prices to maintain their captured market. The units they are projecting to be sold the following year is

a. 750

b. 800

C. 840

d. 880

10. Refer to Certified Inc. The company is expecting a growth rate of 12%. They will not increase their prices to maintain their captured market. The projected sales to be earned the following year is

a Php110,000

b. Php105,000

c. Php100,000

d. Php93,750

11. Refer to Certified Inc. Based on the information provided, the projected EBITDA for the succeeding year is

a. Php45,250

b. Php43,250

c. Php41,250

d. Php38,750

12. Basketball Corp. reported present value of its future cash flows amounting to Php1,450. The company's investment is Php500 for it to operates. The net present value of the company is

a. Php1,450

b. Php950

c. Php500

d. Zero