Hi, I was wondering if you could direct me in solving this question. I'm not very sure how to go about it at all.

Question 5] Jason Kidwell is considering whether to acquire a local toyr manufacturing company, Toys 'n' Things Inc. The company's annual income statements for three years are as follows: 2014 2013 2012 Revenues 5 2,243,155 5 21701501 5 2,115,002 Cost of goods sold {1,453,115 1} {1300.926} {1,324,251} Gross prots I 7185.104 5 T013525 $ "140.251 Depreciation and administrative expenses {$4,316} {550,150} {561,500} Net operating income 5 210,298 5 150,325 5 128,251 a) Jason has learned that small private companies such as this one typically sell for EBI'IDA multiples of three to four tiines. Dapreciation expense equals $50,000 per year. 1What value would you recommend Jason put on the company? b) The current owner of Toys'n' Things indicated to Jason that he would not take less than ve times 2014 EBITDA to sell out. Jason decides that, based on what he knows about the company, the price could not be justied. However, upon further investigation, Jason learns that the owner's wife is paid $ 100,000 a year for administrative services that Jason thinks could he done by a $50,000-per-year assistant. Moreover, the owner pays himself a salary of $250,000 per year to run the business, which Jason thinks is at least $50,{H}0 too high based on the demands of the business. In addition, Jason thinks that, by outsourcing raw materials to Asia, he can reduce the rm's cost of goods sold by 10%. After making adjustments for excessive salaries, what value should Jason place on the business? Can Jason justify the value the owner is placing on the business