Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The projected free cash flows for Tommy's Pizzeria and Taco Restaurant for 2018 through 2021 are given in the table below. After 2021, Tommy's Pizzeria

image text in transcribedimage text in transcribed

The projected free cash flows for Tommy's Pizzeria and Taco Restaurant for 2018 through 2021 are given in the table below. After 2021, Tommy's Pizzeria and Taco Restaurant is expected to see its free cash flows increase at an annual rate of 5.0%. Projected Free Cash Flows Tommy's Pizzeria and Taco Restaurant YEAR 2018 2019 2020 2021 FREE CASH FLOW S 345,000 S 375,000 S 400,000 S 425,000 9. (3 pts.) Instead, at the end of 2020, Tommy decides to sell his restaurant. He has proven its success, so he is offered a price equal to the multiple customarily used for the restaurant industry in "Industry-Specific Multiples," discussed in Lesson 13. If his earnings before interest and taxes (EBIT) is S300,000 in 2020, how much is his restaurant worth? The projected free cash flows for Tommy's Pizzeria and Taco Restaurant for 2018 through 2021 are given in the table below. After 2021, Tommy's Pizzeria and Taco Restaurant is expected to see its free cash flows increase at an annual rate of 5.0%. Projected Free Cash Flows Tommy's Pizzeria and Taco Restaurant YEAR 2018 2019 2020 2021 FREE CASH FLOW S 345,000 S 375,000 S 400,000 S 425,000 9. (3 pts.) Instead, at the end of 2020, Tommy decides to sell his restaurant. He has proven its success, so he is offered a price equal to the multiple customarily used for the restaurant industry in "Industry-Specific Multiples," discussed in Lesson 13. If his earnings before interest and taxes (EBIT) is S300,000 in 2020, how much is his restaurant worth

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Financial Management

Authors: Jeff Madura, Roland Fox

4th Edition

147372550X, 9781473725508

More Books

Students also viewed these Finance questions

Question

Th eir solution was to give me a long-distance number to call.

Answered: 1 week ago