Question
hi how much I just need those two attached questions , plus MCQ Question 2.2. (TCO A) Which is the correct chronology of events in
hi how much
I just need those two attached questions , plus MCQ
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entrepreneurs assets, family or friends assets, and commercial banks. business angles, venture capitalists, and family or friends assets. business operations, entrepreneurs assets, suppliers and customers, and business angles. family or friends assets and entrepreneurs assets. None of the above
A business owned and operated by one person A voluntary association of two or more persons to carry on a business for profit as co-owners The governing body for corporate activity An organization in which each owner has limited personal liability A firm where common stock is sold among investors
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Question 4.4. (TCO B) Use the following current year financial statements for Sambora Engineering to perform ratio analysis. Sambora Engineering Income Statement Revenue $3,400,000 Cost of goods sold 1,100,000 Gross profit 2,300,000 Operating expenses 1,400,000 Operating income (EBIT) 900,000 Interest expense 350,000 Earnings before taxes 550,000 Taxes (at 40%) 220,000 Net income $330,000 Sambora Engineering Balance Sheet Current assets Cash $800,000 Accounts receivable 450,000 Inventory 150,000 Total current assets 1,400,000 Non-current assets Fixed assets 5,000,000 Accumulated depreciation (1,250,000) Net fixed assets 3,750,000 Total assets $5,150,000 Current liabilities Accounts payable Accrued liabilities Total current liabilities Non-current liabilities Bonds payable Total liabilities $970,000 180,000 1,150,000 1,000,000 2,150,000 Common stock 300,000 Retained earnings 2,700,000 Total shareholders' equity Total liabilities and shareholders' equity 3,000,000 $5,150,000 (a) Calculate the firm's total-debt-to-assets ratio. Assume that the firm's prior year-end total liabilties balance was $2.4 million and the firm's prior year-end total assets balance was $5 million. (b) Calculate the firm's net working capital. (c) What is the number of \"days in inventory\" for Sambora Engineering? Assume that the firm's year-end inventory balance for the prior year was $100,000. (d) What is the firm's return on equity at the end of this year? Assume that the firm's year-end shareholders' equity balance for the prior year was $2,600,000. (Points : 40) Question 5.5. (TCO H) Your management team identifies a security software firm, DigiVault, that has developed a 256-bit data encryption key that is licensed by Fortune 100 companies and governments to protect sensitive database information from prying eyes. The firm's founders are out of money and want to sell their technology. Because you and your team don't have enough money to acquire the firm outright on your own, you turn to outside sources of funding. A venture bank is willing to put up a $3.5 million, five-year loan at 11% per year, which only has interest payments due during its life; the principal balance will be paid off at the liquidity event. Your team puts up $750,000 of its own capital. One of your friends from the MBA program is a venture capitalist, and his firm agrees to invest $3.5 million at an expected 60% annual return for five years, at which time they expect a liquidity event in order to obtain their money and the return back. Include all your calculations to support each answer in order to earn full credit. Answers must be completed in sequence. Required: (a) Assume that in five years, DigiVault will have an expected exit enterprise value of $48 million, based on an EBITDA multiple of 5.0 from similar exit transactions. What does this indicate the firm's expected EBITDA will be at that time? (b) Given the future value calculated in (a), what will be the equity value at that time? (c) Because the VC firm expects a 60% compound return on its investment, what would be the dollar value of its portion of the equity value you calculated in (b)? (d) Based on your answer in (c), what would be the amount of the equity up front that you would have to give up in order to obtain DigiVault's original venture capital investment? (e) What will be the dollar value of the management team's original $750,000 equity investment at the time of the liquidity event? (Points : 50)
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