Victoria Enterprises expects earnings before interest and taxes (EBIT) next year of $2 million. Its depreciation...

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Victoria Enterprises expects earnings before interest and taxes (EBIT) next year of $2 million. Its depreciation and capital

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Answer 1

Answer #1

Free cash flow next year = EBIT(1-Tax rate)+Depreciation – Capital expenditure – Increase in working capital

= 2,000,000(1-35%)+290,000-290,0000-46,000

= $1,254,000

Enterprise value = Free cash flow next year/(WACC – growth rate)

= 1,254,000/(10%-6%)

= $31,350,000

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Answer 2

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Victoria Enterprises expects earnings before interest and taxes (EBIT) next year of $2.1 million. Its depreciation...

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Victoria Enterprises expects earnings before interest and taxes (EBIT) next year of $2 million. Its depreciation...