Use the Table for the Question(s)below

question 68

Multiple Choice

Use the table for the question(s) below.

-General Industries is expected to generate the above free cash flows over the next five years,after which free cash flows are expected to grow at a rate of 3% per year.If the weighted average cost of capital is 8% and General Industries has cash of $10 million,debt of $40 million,and 80 million shares outstanding,what is General Industries' expected terminal enterprise value?

• A)$558.2 million
• B)$109.5 million
• C)$442.8 million
• D)$513.6 million
• E)$659.2 million

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Definitions:

Accounts Receivable

Outstanding payments due to a firm from its clients for delivered services or products yet to be settled.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Credit Sales

Sales in which revenue is recognized at the point of sale but payment is deferred.

Accounts Receivable

Amounts owed to a company by customers for goods or services that have been delivered but not yet paid for.