BUSINESS VALUATION METHODS (All Valuations MUST BE based on Historical Data) I. Adjusted Book Value Take the Book Value of net worth -assets not acquired +liabilities not assumed +fair market value of assets acquired +any net worth adjustments =Adjusted Book Value ____________________________________________________________ II. Capitalized Adjusted Earnings First Step: Adjust Historical Earnings Seller’s Discretionary Cash Flow Net Profit +Officer’s salary +Discretionary expenses -New Owner salary
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the company's cash flow. One of the reasons that we shouldn't solely use the cash flows is because the projects' cash flow are not all in the same time point; the dollar value today might not be the same in fifteen years later. Thus we need to have all of the cash flows in the same time period. Besides that, as stated in the table(Exhibit 1), Project 3 has the highest sum of cash flow benefits yet the payback is not accomplished until fifteen years later. Project 7, however, have the second lowest
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investment criterion because the net present value (NPV) rule always dominates it.” 4. Bibliography References Assignment Part A This report evaluates the viability for marketing and distribution of genetically engineered soya seeds developed by a biotechnology firm. The firm will supply seeds and permit ProGen to market and distribute them under a licence. The evaluation methods used for this proposal are net present value (NPV), internal rate of return
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Guillermo should increase his sales through changing his business model into a brokerage. There are several capital budgeting techniques that Guillermo can use to determine how best to proceed with his decisions. These concepts include the net present value, internal rate of return, the simple and discounted payback method, the unadjusted rate of return and the annual rate of return method (it is important to note that there are various other capital budgeting techniques). It is important to remember
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Submitted to: Prof. Syed Sadir Ali Zaidi Submitted by: * Adil Amin (2013-MBA-015) * Tayyab Furqan (2013-MBA-028) * Muhammad Tariq Shaban (2013-MBA-022) Course Title: Fundamental of Corporate Finance TABLE OF CONTENTS ACKNOWLEDGEMENT 3 EXECUTIVE SUMMARY 4 Vision Statement: 4 Mission Statement: 4 PROJECT PROFILE 5 HUMAN RESOURCE REQUIREMENT: 8 Office Equipment & Other Equipment Requirement: 9 Revenue Generation: 9 REVENUE: 10 FIXED COST
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Fall 2014 Take-Home Assignment 1: Exercise 2 In the following table we calculated the present value (PV) of all three plans at the given discount rate and summed them up to the net present value (NPV). For part a) the highest NPV of CHF 185’914 results in Plan C (marked in green). In part b) Plan A provides the highest NPV of CHF 92’828 (marked in orange). Comparing to a), the change in plan can be explained with the changing discount rate from 8% to 30%. Later returns loses weight
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Lasting Impressions Company Lasting Impressions Company (LI) is a medium-sized commercial printer of promotional advertising brochures, booklets, and other direct-mail pieces. The firm’s major clients are New York- and Chicago- based ad agencies. The typical job is characterized by high quality and production runs of over 50,000 units. LI has not been able to complete effectively with larger printers because of its existing older, inefficient presses. The firm is currently having problems cost effectively
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next 5 years. In table 1 you will see the predicted cash flows for each of the next 5 years. Now we will find out the present value of those cash flows by using a discount rate of 11% which is Google’s Cost of Capital. The equation for the present value of cash flows is calculated using this equation: PV of CF = CF1 / (1+r)1 + CF2 / (1+r)2 + CF3 / (1+r)3 + CF4 / (1+r)4 + CF5 / (1+r)5 Now to get a good understanding of this equation we have to take the total Present Value (PV) of Cash Flows
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investment’s free cash flows? 2) Determine the value of the base case acquisition opportunity. Discuss the inputs and assumptions that underlie your calculations. b) What are the amounts and timing of the investment’s free cash flows from 2013 through 2022? b) What is the terminal value of the final 10 years of the acquisition, as of 2022? c) What is the net present value of this base investment? 3) Determine the value of the follow-up expansion investment opportunity. Discuss
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CORPORATE FINANCE T H IRD E DIT ION JONATHAN BERK STANFORD UNIVERSITY PETER D E MARZO STANFORD UNIVERSITY Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo To Rebecca, Natasha, and Hannah, for the love and for being there —J. B. To Kaui, Pono, Koa, and Kai, for all the love and laughter —P. D. Editor in Chief:
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