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Investment Banker

Real-Life Activities

Real-Life Math -- Solution

Here's how we did it:

Value of excess earnings = $53,750 x 2.5

Value of excess earnings = $134,375

Estimated total value = tangible assets ($225,000) + excess earnings ($134,375)

Estimated total value = $359,375

The estimated total value of Enrichment Publishing is $359,375.

So here's what your list should say:

  1. Tangible assets = $225,000
  2. Total earnings = $92,000
  3. Tangible asset earnings = $38,250
  4. Excess earnings = $53,750
  5. Value of excess earnings = $134,375
  6. Estimated total value = $359,375

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