Big Tree Inn Has an EBIT of $121,318,a Decrease in Net

question 9

Multiple Choice

Big Tree Inn has an EBIT of $121,318,a decrease in net working capital of $1,204,interest expense of $5,200,net capital spending of $5,200,and a tax rate of 35 percent.The firm’s WACC is 12.6 percent and its growth rate is 2.7 percent.What is the adjusted value of the firm?

• A)$694,311.08
• B)$708,007.49
• C)$756,168.69
• D)$733,333.33
• E)$789,022.15

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Definitions:

Triangular Distribution

A probability distribution with a shape formed by a triangle, which is specified by a minimum, a maximum, and a mode value.

Expected Value

The weighted average of all possible values of a random variable, taking into account their probabilities.

Bounded Distribution

A statistical distribution with both a minimum and maximum value, limiting the range of possible outcomes.

Uniform Continuous Probability Distribution

A type of distribution where all outcomes in a certain interval are equally likely.