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Please explain what is the highest level of initial investment FOR THE COMPANY BELOW instead of the $500,000 I HAVE, Why? Give a complete explanation
Please explain what is the highest level of initial investment FOR THE COMPANY BELOW instead of the $500,000 I HAVE, Why? Give a complete explanation of the highest dollar amount you would be willing to invest for these returns.
Company 1 Discount Rate (WACC) Perpetual Growth Rate 10.00% 2.50% Year 1 Year 2 Year 3 Year 4 Year 5 $30.000 550.000 80,000 S120.000 $170,000 66.67% 60.00% 50.00% 41.67% Perpetual Growth Rate $500,000 S500,000 S500,000 S500.000 S500,000 Less Company Purchase Expense $470.000 S450.000 420.000 $380,000 $330,000 Basic Cash Flow S27 273 $41.322 580,105.18 $81.962 S105,557 Discounted Cash Flow (DCF) Present Value (PV) Historical Free Cash Flow Growth Rate Less Company Purchase Expenze Basic Cash Flow Discounted Cash Flow (DCF) Present Value (PV) Year 5 Terminal Value (TV) S295.000 2.50% $500.000 S205.000 S183,172Step by Step Solution
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