Choose the correct answer with solution. Pls choose only the answer in the choices. Q1. How much is the net cash flow of Gising Company in Year 1?a. 390,000b. 290,000c. 220,000d. 140,000Q2. How much is the terminal value recognized after the three-year forecast period?a. 10,880,000b. 12,466,667c. 13,090,000d. 10,880,000Q3. What is the net Cash flow to the Firm?a. 11,140,489b. 12,103,272c. 12,808,412d. 13,974,000Q4. What is the net cash flow to equity?a. 10,140,489b. 11,103, 272c. 11, 140, 489d. 12, 103, 272 Gising Company is preparing the following financial information for presentation to prospective investors.Year 1Year 2Year 3Revenues1,000,0001,500,0002,000,000Cost of Goods Sold500,000700,0001,100,000Operating Expenses300,000500,000700,000Corporate income tax rate is 30%. Gising Company is looking at a 5% constant growth on net cash flowsafter the three-year historical forecast they prepared. Weighted average cost of capital of Gising Companyis 8%. The operating expenses include annual depreciation of Php250,000. Gising Company has long-termdebt amounting to Php1,000,000. Gising Company projected that it will need additional PhP50,000 every yearto support increasing working capital requirements and Php 120,000 for capital investments.

As given the following financial data is being prepared by Gising for presentation to potential…

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Accounting

Choose the correct answer with solution. Pls choose only the answer in the choices.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 5P

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Question

Choose the correct answer with solution. Pls choose only the answer in the choices.

Q1. How much is the net cash flow of Gising Company in Year 1?
a. 390,000
b. 290,000
c. 220,000
d. 140,000

Q2. How much is the terminal value recognized after the three-year forecast period?
a. 10,880,000
b. 12,466,667
c. 13,090,000
d. 10,880,000

Q3. What is the net Cash flow to the Firm?
a. 11,140,489
b. 12,103,272
c. 12,808,412
d. 13,974,000

Q4. What is the net cash flow to equity?
a. 10,140,489
b. 11,103, 272
c. 11, 140, 489
d. 12, 103, 272

Gising Company is preparing the following financial information for presentation to prospective investors.
Year 1
Year 2
Year 3
Revenues
1,000,000
1,500,000
2,000,000
Cost of Goods Sold
500,000
700,000
1,100,000
Operating Expenses
300,000
500,000
700,000
Corporate income tax rate is 30%. Gising Company is looking at a 5% constant growth on net cash flows
after the three-year historical forecast they prepared. Weighted average cost of capital of Gising Company
is 8%. The operating expenses include annual depreciation of Php250,000. Gising Company has long-term
debt amounting to Php1,000,000. Gising Company projected that it will need additional PhP50,000 every year
to support increasing working capital requirements and Php 120,000 for capital investments.

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

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