(i) Assuming Hal's Net Income will be $1M in 2024 and you expect it to grow by a compounded annual growth rate of 10% from 2024 to 2026, what would the 2026 Net Income be? (Show your calculations)__ (ii) If you expected comparable Ice Cream companies to have a value of 10x Net Income (i.e., a 10% cap rate), what would the value of the Hal's be at the end of 2026? (Show your calculations) (iii) Considering the time-value-of-money concept, what would the value of the company be "today" (12/31/2022) if you were to use a discount rate of 7% (Show your calculations) on the value that you calculated in 5 (ii) above? (iv) Using the value you calculated in 6(iii) above, if you were on Hal's Board of Directors and someone offered to buy Hal's firm today for $5M, would you vote to sell the company? (yes or no):_ Why or why not_
(i) Assuming Hal's Net Income will be $1M in 2024 and you expect it to grow by a compounded annual growth rate of 10% from 2024 to 2026, what would the 2026 Net Income be? (Show your calculations)__ (ii) If you expected comparable Ice Cream companies to have a value of 10x Net Income (i.e., a 10% cap rate), what would the value of the Hal's be at the end of 2026? (Show your calculations) (iii) Considering the time-value-of-money concept, what would the value of the company be "today" (12/31/2022) if you were to use a discount rate of 7% (Show your calculations) on the value that you calculated in 5 (ii) above? (iv) Using the value you calculated in 6(iii) above, if you were on Hal's Board of Directors and someone offered to buy Hal's firm today for $5M, would you vote to sell the company? (yes or no):_ Why or why not_
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
Problem 10SPA: RATIO ANALY SIS OF COMPARATI VE FIN ANCIAL STATE MENT S Refer to the financial statements in Problem...
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