SOLUTION: • You estimate that the purchase price for this firm would be $200,000 and that additional net working capital would be needed in the amount of $60,000 in year 0, an additional

Question 1136367: • You estimate that the purchase price for this firm would be $200,000 and that additional net working
capital would be needed in the amount of $60,000 in year 0, an additional $15,000 in year 2 and then
$15,000 in year 5.
• BSL usually spend about $275,000 per year in advertising. If you make this acquisition, you would
ask that advertising spending be increased by an incremental one-time amount of $50,000 in year 0
to publicize the firm’s expansion.
• Your finance leader has indicated that the firm has access to a credit line and could borrow the funds
at a rate of 6%. He also mentions that when he runs project economics for capital budgeting (such
as a new copier or a company car), he recommends a standard 10% rate discount, but the one other
time they looked at an acquisition of a smaller firm, he used a 12% rate discount. Obviously you will
want to select the most appropriate discount rate for this type of project.
• At the end of 8 years, the plan is to sell this division. The estimated terminal value (the sale and the
return of working capital) is conservatively estimated to be $400,000 of after-tax cash flow help
Answer by ikleyn(52776) (Show Source): You can put this solution on YOUR website!
.

I read attentively your post once - and did not find any question in it.

Then I read your post even more attentively for the second time - and did not find any question again.

So, I do not understand for what reason it was submitted to the forum.

Written in perfect English, it has no any Math sense and has no any reason to be posted to this forum.

You simply stole my time.

RELATED QUESTIONS
You are the General Manager at the Bicker, Slaughter, and Lynch Law Firm. There is an... (answered by ikleyn)

THIS IS SO CONFUSING, NO MATTER HOW MANY TIMES I READ IT, THERE SEEMS TO BE NO ONE CLEAR... (answered by solver91311)

A company is considering implementing an investment opportunity in Dodoma. To identify... (answered by ikleyn)

3. Pharmos Incorporated is a Pharmaceutical Company which is considering investing in a... (answered by ikleyn)

Last year Rattner Robotics had $5 million in operating income (EBIT). The company had... (answered by jim_thompson5910)

a firm claims that only 10% of its accounts receivables are over 30 days past due. The... (answered by ewatrrr)