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has outstanding debt of P10,000,000. What is the net cash flow to the firm of Unicap Company?

has outstanding debt of P10,000,000. What is the net cash flow to the firm of Unicap Company?

Corporate Fin Focused Approach
Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter12: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 12SP
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VALUATION CÔNCEPTS AND METHODOLOGIES b 24. Unicap Company is opening its doors to investors and shared the following prospective financial information: A Unicap Company is opening its doors to investors and shared the following prospective financial information: 2021 2022 10,000,000 2023 2024 14,000,000 15,000,000 Revenues 12,000,000 Cost of Goods Sold 5,000,000 6,000,000 7,000,000 7,500,000 Gross Profit Selling and Distribution 5,000,000 6,000,000 7,000,000 1,000,000 1,200,000 7,500,000 1,400,000 1,500,000 Administrative 400,000 400,000 400,000 400,000 Depreciation Expense 2,000,000 2,000,000 2,000,000 2,000,000 Operating Income Income Tax Expense 1,600,000 2,400,000 3,200,000 3,600,000 480,000 720,000 960,000 1,080,000 Net Profit 1,120,000 1,680,000 2,240,000 2,520,000 Required Annual Capital Investment 1,000,000 1,000,000 - 1,000,000 1,000,000 XYZ, an equity capital venture company, is considering infusing money to Unicap Company. Based on its assessment, cost of capital associated with this type of investment is at 10%. Unicap Company has going concern assumption with net cash flows expected to grow by 5%. In addition to potential capital investment, Unicap Company has outstanding debt of P10,000,000. What is the net cash flow to the firm of Unicap Company? a. Php70,958,800 b. Php59,468,971 C. Php54,879,120 a. Php50,488,355 4 25. Refer to Unicap Company. If XYZ Company is buying 20% of Unicap Company, what is the reasonable price that they should pay? a. Php49,468,971 b. Php17,096,000 C. Php11,893,794 d. Php9,893,794
Transcribed Image Text:VALUATION CÔNCEPTS AND METHODOLOGIES b 24. Unicap Company is opening its doors to investors and shared the following prospective financial information: A Unicap Company is opening its doors to investors and shared the following prospective financial information: 2021 2022 10,000,000 2023 2024 14,000,000 15,000,000 Revenues 12,000,000 Cost of Goods Sold 5,000,000 6,000,000 7,000,000 7,500,000 Gross Profit Selling and Distribution 5,000,000 6,000,000 7,000,000 1,000,000 1,200,000 7,500,000 1,400,000 1,500,000 Administrative 400,000 400,000 400,000 400,000 Depreciation Expense 2,000,000 2,000,000 2,000,000 2,000,000 Operating Income Income Tax Expense 1,600,000 2,400,000 3,200,000 3,600,000 480,000 720,000 960,000 1,080,000 Net Profit 1,120,000 1,680,000 2,240,000 2,520,000 Required Annual Capital Investment 1,000,000 1,000,000 - 1,000,000 1,000,000 XYZ, an equity capital venture company, is considering infusing money to Unicap Company. Based on its assessment, cost of capital associated with this type of investment is at 10%. Unicap Company has going concern assumption with net cash flows expected to grow by 5%. In addition to potential capital investment, Unicap Company has outstanding debt of P10,000,000. What is the net cash flow to the firm of Unicap Company? a. Php70,958,800 b. Php59,468,971 C. Php54,879,120 a. Php50,488,355 4 25. Refer to Unicap Company. If XYZ Company is buying 20% of Unicap Company, what is the reasonable price that they should pay? a. Php49,468,971 b. Php17,096,000 C. Php11,893,794 d. Php9,893,794
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