The King Mattress Company had the following operating results for 2018-2019. In addition, the company paid dividends in both 2018 and 2019 of $67,200 per year and made capital expenditures in both years of $30,000 per year. The company's stock price in 2018 was $8 and $7 in 2019. The industry average earnings multiple for the mattress industry was 9 in 2019 and the free cash flow and sales multiples were 18 and 1.5, respectively. The company is publicly owned and has 1,600,000 shares of outstanding stock at the end of 2019.

Balance Sheet, Dec 31,
	2019			2018
Cash	$	364,000		$	124,000
Accounts Receivable	$	374,000		$	424,000
Inventory	$	274,000		$	324,000
Total Current Assets	$	1,012,000		$	872,000
Long-lived Assets		1,320,000			1,340,000
Total Assets	$	2,332,000		$	2,212,000
Current Liabilities	$	224,000		$	324,000
Long-term Debt		624,000			524,000
Shareholder Equity		1,484,000			1,364,000
Total Debt and Equity	$	2,332,000		$	2,212,000

Income Statement, for year ended Dec 31,
	2019			2018
Sales	$	4,870,000		$	4,620,000
Cost of Sales		4,196,000			4,096,000
Gross Margin		674,000			524,000
Operating Expenses		362,000			412,000
Operating Income		312,000			112,000
Taxes		124,800			44,800
Net Income	$	187,200		$	67,200

Cash Flow From Operations	2019				2018
Net Income	$	187,200			$	67,200
Plus Depreciation Expense		50,000				50,000
+ Decrease (-inc) in AccRec. and Inv.		100,000				-
+ Increase (-dec) in Cur. Liabl.		(100,000	)			-
Cash Flow from Operations	$	237,200			$	117,200

The value of the company, calculated using the free cash flow multiple for 2019 is:

Multiple Choice

• $1,220,000

• $1,620,000

• $2,520,000

• $8,400,000