Estimate a Venture's Cash Flow Expected Next Year Based on the Following

question 8

Multiple Choice

Estimate a venture's cash flow expected next year based on the following information: current year's net sales = $400,000; terminal value = $500,000; constant future growth rate = 10%; and venture investors' required rate of return = 20%.

• A)$80,000
• B)$40,000
• C)$50,000
• D)$60,000

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Definitions:

Measurable

The characteristic of being able to be quantified or assessed through metrics or data.

Realistic

Pertaining to or representing conditions as they actually are; practical and pragmatic in approach or assessment.

Broad

Encompassing a wide range or scope; not limited or narrow.

Target Market

Identifies a specific group of consumers at which a company aims its products and services.