A Firm Has an EBITDA Forecast of $150,000 in 5

question 51

Multiple Choice

A firm has an EBITDA forecast of $150,000 in 5 years.If its EBITDA multiple is 9 and the discount rate is 5%,what is the PV of the firm's terminal value?

• A)$1.06 million
• B)$1.35 million
• C)$1.15 million
• D)$150,000
• E)$117,530

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Definitions:

Inductive Reactance

The opposition that inductors present to alternating current, proportional to the frequency of the AC and the inductance, measured in ohms.

Power (P)

In an electrical context, the rate at which electrical energy is transferred by an electric circuit, usually measured in watts.

Parallel Circuit

An electrical circuit where components are connected across common points or junctions, creating multiple paths for current flow.

Inductive Reactance

The opposition to the change of current flow through an inductor in an AC circuit, caused by the inductor's capacity to store energy in a magnetic field.