Hal's Ice Cream Stands$ ThousandsAssetsCash and cash equivalentsAccounts receivableInventoriesTotal Current AssetsEquipmentLess accumulated depreciationLand HoldingsTotal AssetsLiabilities & Shareholders' EquityAccounts PayableShort-term DebtTotal Current LiabilitiesLong-Term DebtTotal LiabilitiesShareholders' EquityLiabilities & Shareholders' EquityHal's Income Statement for the Year Ending12/31/2021($ 000s except for earnings per share)SalesCost of Goods SoldPayroll and employee benefitsGross Operating ProfitSelling, general and administrative expensesIncome from OperationsInterest expenseIncome taxesNet IncomeEarnings per share of common stock ($)2021$1005075$225300(5)15$53520050250100350???$535$500100200200100100520$75$0.25 8.(i)Assuming Hal's Net Income will be $1M in 2024 and you expect it to grow by a compoundedannual growth rate of 10% from 2024 to 2026, what would the 2026 Net Income be? (Showyour calculations)_(ii) If you expected comparable Ice Cream companies to have a value of 10x Net Income (i.e., a10% cap rate), what would the value of the Hal's be at the end of 2026? (Show yourcalculations)(iii) Considering the time-value-of-money concept, what would the value of the company be"today" (12/31/2022) if you were to use a discount rate of 7% (Show your calculations) on thevalue that you calculated in 5 (ii) above?(iv) Using the value you calculated in 6(iii) above, if you were on Hal's Board of Directors andsomeone offered to buy Hal's firm today for $5M, would you vote to sell the company? (yes orno):Why or why not

Expected Net Income in 2024 = $ 1 M or $1000000Compounded annual growth rate “r” = 10%Number of…

(i) Assuming Hal's Net Income will be $1M in 2024 and you expect it to grow by a compounded annual growth rate of 10% from 2024 to 2026, what would the 2026 Net Income be? (Show your calculations)__ (ii) If you expected comparable Ice Cream companies to have a value of 10x Net Income (i.e., a 10% cap rate), what would the value of the Hal's be at the end of 2026? (Show your calculations) (iii) Considering the time-value-of-money concept, what would the value of the company be "today" (12/31/2022) if you were to use a discount rate of 7% (Show your calculations) on the value that you calculated in 5 (ii) above? (iv) Using the value you calculated in 6(iii) above, if you were on Hal's Board of Directors and someone offered to buy Hal's firm today for $5M, would you vote to sell the company? (yes or no):_ Why or why not_

(i) Assuming Hal's Net Income will be $1M in 2024 and you expect it to grow by a compounded annual growth rate of 10% from 2024 to 2026, what would the 2026 Net Income be? (Show your calculations)__ (ii) If you expected comparable Ice Cream companies to have a value of 10x Net Income (i.e., a 10% cap rate), what would the value of the Hal's be at the end of 2026? (Show your calculations) (iii) Considering the time-value-of-money concept, what would the value of the company be "today" (12/31/2022) if you were to use a discount rate of 7% (Show your calculations) on the value that you calculated in 5 (ii) above? (iv) Using the value you calculated in 6(iii) above, if you were on Hal's Board of Directors and someone offered to buy Hal's firm today for $5M, would you vote to sell the company? (yes or no):_ Why or why not_

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 10SPA: RATIO ANALY SIS OF COMPARATI VE FIN ANCIAL STATE MENT S Refer to the financial statements in Problem...

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