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Assume you are valuing a small manufacturing concern for estate purposes.

Your analysis produced the following valuation results for a 100% equity interest in the operations (there is no debt).

$3,525,000 Discounted cash flow ( incorporates the effects of a projected plant expansion to be completed in year 4)
$4,100,000 Income capitalization (expected growth of 4% next year also used as long-term growth rate)

$3,800,000 Pricing multiple of sales (based on the median data of 5 recent sales of similarly-sized entities in the same industry)

$3,450,000 Pricing multiple of earnings (based on the median data of 5 recent sales of similarly-sized entities in the same industry)

$3,200,000 Asset approach (the entity's major assets are the existing plant and equipment, raw materials and work-in-process inventory, and accounts receivable)

Based on this limited information and your own knowledge, how would you incorporate the above valuation results in your conclusion? Why? Prepare aone-page response for your answer

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M954475

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