Question
In: Finance
Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a...
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Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a debt-equity ratio of 35 percent and makes interest payments of $61,000 at the end of each year. The cost of the firm’s levered equity is 18 percent. Each store estimates that annual sales will be $1.56 million; annual cost of goods sold will be $840,000; and annual general and administrative costs will be $500,000. These cash flows are expected to remain the same forever. The corporate tax rate is 24 percent. |
| a. |
Use the flow to equity approach to determine the value of the company’s equity. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) |
| b. | What is the total value of the company? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) |
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a...
Pompeii Pizza Club owns three identical restaurants popular for
their specialty pizzas. Each restaurant has a debt-equity ratio of
30 percent and makes interest payments of $43,000 at the end of
each year. The cost of the firm’s levered equity is 16 percent.
Each store estimates that annual sales will be $1.29 million;
annual cost of goods sold will be $750,000; and annual general and
administrative costs will be $410,000. These cash flows are
expected to remain the same forever....
Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a...
Pompeii Pizza Club owns three identical restaurants popular for
their specialty pizzas. Each restaurant has a debt-equity ratio of
45 percent and makes interest payments of $51,000 at the end of
each year. The cost of the firm’s levered equity is 16 percent.
Each store estimates that annual sales will be $1.41 million;
annual cost of goods sold will be $790,000; and annual general and
administrative costs will be $450,000. These cash flows are
expected to remain the same forever....
Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a...
Pompeii Pizza Club owns three identical restaurants popular for
their specialty pizzas. Each restaurant has a debt-equity ratio of
40 percent and makes interest payments of $45,000 at the end of
each year. The cost of the firm’s levered equity is 18 percent.
Each store estimates that annual sales will be $1.32 million;
annual cost of goods sold will be $760,000; and annual general and
administrative costs will be $420,000. These cash flows are
expected to remain the same forever....
Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a...
Pompeii Pizza Club owns three identical restaurants popular for
their specialty pizzas. Each restaurant has a debt-equity ratio of
45 percent and makes interest payments of $47,000 at the end of
each year. The cost of the firm’s levered equity is 16 percent.
Each store estimates that annual sales will be $1.35 million;
annual cost of goods sold will be $770,000; and annual general and
administrative costs will be $430,000. These cash flows are
expected to remain the same forever....
Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a...
Pompeii Pizza Club owns three identical restaurants popular for
their specialty pizzas. Each restaurant has a debt-equity ratio of
45 percent and makes interest payments of $59,000 at the end of
each year. The cost of the firm’s levered equity is 16 percent.
Each store estimates that annual sales will be $1.53 million;
annual cost of goods sold will be $830,000; and annual general and
administrative costs will be $490,000. These cash flows are
expected to remain the same forever....
Milano Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a...
Milano Pizza Club owns three identical restaurants popular for
their specialty pizzas. Each restaurant has a debt–equity ratio of
30 percent and makes interest payments of $55,000 at the end of
each year. The cost of the firm’s levered equity is 15 percent.
Each store estimates that annual sales will be $1.58 million;
annual cost of goods sold will be $810,000; and annual general and
administrative costs will be $545,000. These cash flows are
expected to remain the same forever....
Milano Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a...
Milano Pizza Club owns three identical restaurants popular for
their specialty pizzas. Each restaurant has a debt–equity ratio of
30 percent and makes interest payments of $47,000 at the end of
each year. The cost of the firm’s levered equity is 22 percent.
Each store estimates that annual sales will be $1.42 million;
annual cost of goods sold will be $730,000; and annual general and
administrative costs will be $465,000. These cash flows are
expected to remain the same forever....
A pizza restaurant sold 24 cheese pizzas and 16 specialty pizzas for a particular day. 14...
A pizza restaurant sold 24 cheese pizzas and 16 specialty pizzas
for a particular day. 14 of the cheese pizzas were sold to
familiies with young children. 6 of the specialty pizzas were sold
to familiies with young children. If a pizza was selected at
random, what is the probability it was a cheese pizza sold to a
family without young children?
A pizza restaurant sold 24 cheese pizzas and 16 specialty pizzas for a particular day. 14...
A pizza restaurant sold 24 cheese pizzas and 16 specialty pizzas
for a particular day. 14 of the cheese pizzas were sold to
familiies with young children. 6 of the specialty pizzas were sold
to familiies with young children. If a pizza was selected at
random, what is the probability it was a specialty pizza or a pizza
sold to a family without young children?
Select one:
a. 20/40 = 1/2
b. 26/40 = 13/20
c. 6/40 = 3/20
d....
1. Tom owns a Pizza Restaurant. Expenses for the restaurant include raw material for pizza at...
1. Tom owns a Pizza Restaurant. Expenses for the restaurant
include raw material for pizza at $6.43 per slice, $142.00 as
monthly rental and $51.00 monthly as insurance. A restaurant sells
pizza at a rate of $11.43/slice. How many slices should the
restaurant sell in a month to break even?
2. You run a nail salon. Fixed monthly cost is $5,595.00 for
rent and utilities, $5,643.00 is spent in salaries and $1,487.00 in
insurance. Also every customer requires approximately $2.00...
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