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What should be a fair market value of a restaurant with the following information? Assume that Depreciation and debt payments will offset each other and
What should be a fair market value of a restaurant with the following information? Assume that Depreciation and debt payments will offset each other and growth in earnings will be offset by replacing machinery Yearly Earnings Before Taxes (EBT) $50,000 Expected Life of Business 7 years Liquidation Value at end of last period (after-tax) $40,000 Required return 20% Applicable tax rate 35% $124 405 36 $250.000.00 $19139285 5128 312.50 $88 312.50
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