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    Value of the firm

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    Assuming no major change in operating ratios going forward, calculate the value of the firm using the following data (end of fiscal year):

    Sales $107,000,000
    Net income $5,350,000
    Interest expense (average) $1,050,000
    Depreciation expense (average) $1,750,000
    Current assets $35,000,000
    Current liabilities $28,500,000
    Capital expenditures (average) $3,800,000
    Cost of capital 10.5%
    Expected annual sales growth (constant) 8.0%
    Combined tax rate 40%

    Please show calculations.

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    Sales 107,000,000
    Net income ...

    Solution Summary

    Value of the firm is expressed.