Location: Center, TX
The attached spreadsheet model is for Dance Furniture Company located in Center, TX, which is currently listed for sale at $2,550,000. This model includes a pro forma income statement and balance sheet for Dance Furniture based on current market assumptions in the area. It also includes an analysis of the costs of capital and internal rate of return forecasted. The spreadsheet model is easy to read and it is easy to change the inputs.
With the input values chosen, the company would have a weighted average cost of capital equal to the internal rate of return (IRR) of 9.19%. This would be accomplished by having very little common stock or around 90,000 shares. As a result, the 9.19% IRR is pleasing to our investors and suitable for their return on equity given current market conditions. For this reason and because of a positive net present value, the listed sales price for the company is a reasonable amount at the above stated $2,550,000.