William and Michael decide to buy the printing press for $50,000 and they finance it by borrowing money from William's parents (paying 10% interest per year). They think the printing press will last about 5 years. After working for a year they have had 40 different designs and sold an average of 100 shirts at $30 of each design. They figure that their profit before interest and taxes is $66,000. The friends each own 50% of the company and William is thinking of leaving the company. They never agreed to an exit plan so when he brought it up Michael got quite upset because William asked Michael to buy him out. He asked for $100,000.

Do you agree with the buyout value of $100,000 - why/why not? Ensure you calculate your valuation of the company using at least two different methods given the information you have available. Assume a tax rate of 27.5%.