Assuming That Ideko Has a EBITDA Multiple of 9

question 48

Multiple Choice

Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation EV/Sales ratio of Ideko in 2010 is closest to:

• A)1.9
• B)1.7
• C)1.6
• D)1.8

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Definitions:

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.

Shut Down

A short-term decision by a firm to cease operations when variable costs exceed revenues, typically in a perfect competition scenario.

Short Run

A time period in economics during which at least one factor of production is fixed, limiting the ability of the economy or firm to fully adjust.

Long Run

A period in which all factors of production and costs are variable, allowing full adjustment to any change.