DMC Co. Income Statement
Sales	$4,321,432
Cost of goods sold	$3,213,213
Gross profit	$1,108,219
Operating expenses
Depreciation	$51,013
Selling, general and admin.	$543,210
Operating income	$513,996
Interest Expense	$65,653
Net Income Before Taxes	$448,343
Income Tax	$123,456
Net income after taxes	$324,887
Annual Capital Expenditure	$75,000

DMC Co. Balance Sheet			Market Values
Cash	$15,000		Land	$150,000
Inventory	$41,000		Buildings	$650,000
Accounts Receivable	$98,000		Equipment	$65,000
Current Assets	$154,000
Land	$35,000
Buildings	$375,000
Equipment	$84,000
Total Assets	$648,000
Accounts Payable	$36,000
Notes Payable	$21,000
Current Liabilities	$57,000
Long Term Debt	$121,000
Total Liabilities	$178,000
Owners Equity/Net Worth	$470,000
Total Liabilities & Equity	$648,000

- Using a free cash flow multiple of 3, what is the value of DMC?

- What is the tangible asset value of DMC, excluding cash?

- You expect cash flow to grow 5% per year for the first five years and then grow at an annual rate of 3% thereafter. You require a return of 35% on an investment of this type. Using the discounted cash flow method, what is the value of DMC Company?