24. Following are a company's income statement at the end of the last year (year 0) andcoming year (year 1). Each year, the company's accounts receivable need to be main-tained at 5% of sales. The company's inventory and accounts payable do not change.Capital expenditure in year 1 is $10,000.YearSalesDepreciationEBITTaxes(a) What is the free cash flow in year 17185,000 92,00020,000 22,00017,000 19,5003,500 3,7000(b) The company's business is mature, so it is expected to generate the same amountof free cash flow every year forever. The firm-specific discount rate is 7%, and therisk-free rate is 2%. What is the enterprise value of the company?(c) The company has $150,000 in cash and $50,000 in debt. In addition, it has 7000shares outstanding. What is the company's stock price per share?

Free cash flows are cash flows that are available for investors after firm has met all operating…

24. Following are a company's income statement at the end of the last year (year 0) and coming year (year 1). Each year, the company's accounts receivable need to be main- tained at 5% of sales. The company's inventory and accounts payable do not change. Capital expenditure in year 1 is $10,000. Year Sales Depreciation EBIT Taxes 0 1 85,000 92,000 20,000 22,000 17,000 19,500 3,500 3,700

24. Following are a company's income statement at the end of the last year (year 0) and coming year (year 1). Each year, the company's accounts receivable need to be main- tained at 5% of sales. The company's inventory and accounts payable do not change. Capital expenditure in year 1 is $10,000. Year Sales Depreciation EBIT Taxes 0 1 85,000 92,000 20,000 22,000 17,000 19,500 3,500 3,700

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 32BE

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What is the payback period (in annual terms) of the following cashflow stream? Year 1: $-986 Year 4: $362 Year 9: $901 Year 13: $-42 Year 15: $808 Year 19: $-951 4
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. In its income statement for the year ended December 31, 2020, Angel Company reported revenue of P5,000,000. The accounts receivable at January 1 is P300,000; Uncollectible accounts written off is P20,000; and accounts receivable at December 31 is P200,000. How much revenue will be reported under the cash basis of accounting? *
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