Jay's Jams Inc

question 57

Multiple Choice

Jay's Jams Inc.was just established with an investment of $3 million.Jay expects his company to generate free cash flow of $800,000 a year for the next 10 years.If Jay's cost of capital is 15%,find the market value and book value of his company.

• A) Market value = $8.0 million; book value = $3.0 million
• B) Market value = $3.0 million; book value = $4.0 million
• C) Market value = $4.0 million; book value = $3.0 million
• D) Market value = $8.0 million; book value = $4.0 million

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Definitions:

Binet

Alfred Binet was a French psychologist who, along with Theodore Simon, developed the first intelligence test in the early 20th century, known as the Binet-Simon scale.

Phonemes

The smallest unit of sound in a language that can distinguish one word from another.

Linguistic Heuristics

Mental shortcuts or rules of thumb used in language processing and problem-solving based on linguistic information.

Syntax

The set of rules, principles, and processes that govern the structure of sentences in a language, determining word order and arrangement.