Use the Tables for the Question(s) Below

question 39

Multiple Choice

Use the tables for the question(s) below.
Estimated 2005 Income Statement and Balance Sheet Data for Ideko Corporation
The following are financial ratios for three comparable companies:

-Based upon the average EV/Sales ratio of the comparable firms,if Ideko holds $6.5 million of cash in excess of its working capital needs,then Ideko's target market value of equity is closest to:

• A) $165 million
• B) $157 million
• C) $193 million
• D) $191 million
• E) $155 million

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Definitions:

On Account

Refers to purchases made or services rendered on a credit basis, implying that payment will be made at a future date.

Raw Materials Inventory

Stocks of basic materials that are used in the production process before undergoing manufacturing.

Work-in-Process Inventory

This refers to the goods that are in the middle of the manufacturing process but are not yet completed.

Manufacturing Overhead-Control

An account that aggregates all indirect manufacturing costs, used to control and allocate overhead costs during production.