managerial Accounting

ACCT520 Final Exam Fall 2022 Choi Corp. had the following operating results for fiscal years ended 2022-2021. In addition, the company paid dividends in both 2022 and 2021 of $60,000 per year. Capital expenditures in both years equaled $30,000 per year. The company's stock price in 2022 was $8 and $7 in 2021. The industry average earnings multiple was 9 in 2022 and the 2022 free cash flow and sales multiples were 16 and end of 2022. 1.5, respectively. The company is publicly owned and has 1,200,000 shares of outstanding stock at the Balance Sheet, Dec 31, 2022 2021 Cash 340,000 100,000 Accounts Receivable 350,000 400,000 inventory 250,000 300,000 Total Current Assets S 940,000 800,000 Long-lived Assets 1,080,000 1,100,000 Total Assets $ 2,020,000 1,900,000 Current Liabilities 200,000 300,000 Long-term Debt 600,000 500,000 Shareholder Equity 1,220,000 1,100,000 Total Debt and Equity $ 2,020,000 1,900,000 Income Statement, for year ended Dec 31, 2022 2021 Sales $ 4,750,000 $ 4,500,000 Cost of Sales 4,100,000 4,000,000 Gross Margin 650,000 500,000 Operating Expenses 350,000 400,000 Operating Income 300,000 100,000 Taxes 120,000 40,000 Net Income $ 180,000 $ 60,000 Cash Flow From Operations 2022 2021 Net Income S 180,000 S 60,000 Plus Depreciation Expense 50,000 50,000 + Decrease (-inc) in AccRec. and Inv. 100,000 + Increase (-dec) in Cur. Liable (100,000) Cash Flow from Operations $ 230,000 $ 110,000 Questions and required calculations for Choi Corp. follow on the next page.21. (10 points) Using the data and information from the previous page, calculate the following for Choi Corp. a. Calculate the 2022 value of the company using the earnings multiple. b. Calculate the 2022 value of the company using the free cash flow multiple c. Calculate the 2022 book value of the company's equity. d. Calculate the 2022 market value of the company. e. Compare Choi's Equity Book Value (c.) to the Market Value (d.). Discuss conceptually (not differences in the numerical calculations) the difference between these two amounts