... present a lower cost for Roy Tyson? Although book value can be considered as the base price for valuation, we recommend Roy Tyson to use the same just as a guide for valuation, but not to make an initial offer using the same. Book value represents the accounting value of Fabricare's assets, but does not represent the intrinsic value of the firm. It includes real assets, but excludes the intangible assets offered by Fabricare (as compared with a start-up company) the more significant of which would be Fabricare's existing client base and Fabricare's experienced employees. We thus valued the initial offer at $214,5781. We used a growth rate of 5%, as this represents the maximum growth of Fabricare had it been run by its current owners. We decided to make the initial offer based on the highest growth rate since we want Roy Tyson to present a win-win situation to ...

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