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The balance sheet of a restaurant shows assets of $500,000 and liabilities at $210,000. The projected net profit for the next year is $120,000 (increasing
The balance sheet of a restaurant shows assets of $500,000 and liabilities at $210,000. The projected net profit for the next year is $120,000 (increasing by 5 percent every year for the next 5 years) before deducting owners salaries, which is $30,000. Assuming a reasonable rate of return on an investment of similar risk is 25 percent, calculate the value of the business using three valuation techniques:
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