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Business, 18.03.2021 01:10 madisonruh

You are asked to value a company with $10,000,000 in revenues and $1,000,000 in EBITDA. You know that a comparable company recently sold for 4x EBITDA. The company you are valuing has debt of $1,250,000 and assets of $4,000,000. The breakdown of the assets is as follows: Land: $1,000,000 (FMV of $2,500,000)
Inventory: $1,000,000 (FMV of $1,000,000)
Accounts Receivable: $2,000,000 (20% of it is probably uncollectible)

Required:
a. Calculate an enterprise value of the company.
b. Calculate an equity value of the company (other than liquidation value).

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