River walk tours is expected to have an ebit of 354000 next, Financial Management

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River walk tours is expected to have an ebit of 354000 next

River Walk Tours is expected to have an EBIT of $354,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $24,000, $2,000, and $33,000, respectively. All are expected to grow at 7 percent per year for three years. After year 4, the adjusted cash flow from assets is expected to grow at 3.2 percent indefinitely. The company’s WACC is 9.2 percent and the tax rate is 34 percent.

What is the terminal value of the firm’s cash flows?

A.$4,123,008

B.$4,691,189

C.$3,711,052

D.$4,008,051

E.$3,992,419

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Financial Management: River walk tours is expected to have an ebit of 354000 next

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