Private Company Valuation and Net Income State Worksheet

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1. If you invest $ 5,000,000 at 10,000,000pre-money valuation, What percentage would you want to own after the investment? Why?
Show your formulas and calculations.
a. 33%
b. 50%
c. nothing because she is my friend
d. 30%
 
The formula for net cash flow to invested capital can be calculated as: (Highlight your answer)
a. Net income after tax, plus non-cash charges, less capital expenditures, less additions to net working capital for operations, plus interest expense (tax-affected)
b. Net income before tax, plus non-cash charges, less capital expenditures, less additions to net working capital for operations, less interest expense (tax-affected)
c. Net income after tax, plus non-cash charges, less capital expenditures, less additions to net working capital for operations, less interest expense (tax-affected)
d. Net income after tax, plus non-cash charges, plus capital expenditures, plus additions to net working capital for operations, less interest expense (tax-affected)



other problems in files.

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Private Company Valuation Name: For those questions where you are asked to comment, write the formulas and explain your results. 1. If you invest $ 5,000,000 at Show your formulas and calculations. 10,000,000 pre-money valuation, What percentage would you want t a. 33% b. 50% c. nothing because she is my friend d. 30% The formula for net cash flow to invested capital can be calculated as: (Highlight your answer) a. Net income after tax, plus non-cash charges, less capital expenditures, less additions to net working capital for o b. Net income before tax, plus non-cash charges, less capital expenditures, less additions to net working capital for c. Net income after tax, plus non-cash charges, less capital expenditures, less additions to net working capital for o d. Net income after tax, plus non-cash charges, plus capital expenditures, plus additions to net working capital for o to net working capital for operations, plus interest expense (tax-affected) ns to net working capital for operations, less interest expense (tax-affected) s to net working capital for operations, less interest expense (tax-affected) 2. Let's assume You are in charge of a $20 Million Kogod venture fund with a 10 yr life To achieve 25% annual return, what multiple of original investment must the fund pay, excluding fees? Develop Assuming the firm makes 10 investments and "law of returns"holds, how much do the investments need to retu What is the required return multiple for the successful investments? What is the return value per successful investment? Kogod VC Fund Year 0 1 2 Initial Capital $20,000,000 a 10 yr life he fund pay, excluding fees? Develop a model. much do the investments need to return, again excluding fees? Is it possible? Is it realistic? 3 4 5 6 7 8 9 10 7. Melinda Corp. reports the following items in their Balance Sheet: $70,000 fixed assets, $3,500 cash, $1,200 sho $4,500 in accounts receivables, $6,000 in inventories, $1,000 in prepaid expenses, $4,000 accounts payable and What is Melinda Corp.’s Quick Ratio? 8. Assuming that Melinda Corp. reported annual sales of $100,000, cost of goods sold of $65,000, average receiv and average payables of $5,700. What is Melinda Corp.’s Average Receivables Collection Period? 9. Assuming that Melinda Corp. reports net income of $5,200 and that its average total equity is $49,000, what is What is Melinda's return on assets? What is Melinda's cash conversion cycle? 13. What is the difference between Fair market value and fair value? In what kind of situations would you use th 14. WACC can add versatility to the valuation, in that a valuation analyst could change the capital structure of an entity wh a. False b. True 15. Style Company has the following historical earnings: Year Earnings 6th year prior 75,400 5th year prior 65,200 4th year prior 87,600 3rd year prior 90,500 2nd year prior 53,900 prior year 47,000 Estimate the future benefits using the unweighted average method. When would you use this method? Show your formula and calculations Estimate the future benefits using the weighted average method. When would you use this method? Show your formula and calculations 20. Which component of the Ibbotson Build-Up Method relates to the “unsystematic risk” associate a. Risk free rate b. Equity risk premium c. Beta d. Specific company risk premium “unsystematic risk” associated with a particular business entity? Please explain your answer. your answer.
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Explanation & Answer

Attached.

Private Company Valuation

Name:

For those questions where you are asked to comment, write the formulas and explain your results.

1. If you invest $ 5.000.000
at
Show your formulas and calculations.
a. 33%
b. 50%
c. nothing because she is my friend
d. 30%

10.000.000 pre-money valuation, What percentage would you want t

0,33333

Pre-money valuation is before investment and hence the total amount will be sum of investor's money an
total = ($5,000,000 + $10,000,000) = $15,000,000
Share = ($5,000,000 / $15,000,000) x 100% = 33.33%
Answer: a. 33%

The formula for net cash flow to invested capital can be calculated as: (Highlight your answer)
a. Net income after tax, plus non-cash charges, less capital expenditures, less additions to net working capital for o
b. Net income before tax, plus non-cash charges, less capital expenditures, less additions to net working capital for
c. Net income after tax, plus non-cash charges, less capital expenditures, less additions to net working capital for o
d. Net income after tax, plus non-cash charges, plus capital expenditures, plus additions to net working capital for o

rcentage would you want to own after the investment? Why?

e sum of investor's money and entrepreneurs money.
$15,000,000
100% = 33.33%

to net working capital for operatio...


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