FIN515 Week 7 Project Graded A

Apr 24th, 2015
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FIN515 Week 7 Project Graded A

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(13-10) Corporate ValuationThe financial statements of Lioi Steel Fabricators are shown below-both the actual results for 2010 and the projections for 2011. Free cash flow is expected to grow at a 6% rate after 2011. The weighted average cost of capital is 11%.Income Statements for the Year Ending December 31 (Millions of Dollars Except for Per Share Data)a. If operating capital as of 12/31/2010 is $502.2 million, what is the free cash flow for 12/31/2011?Ans:NOPAT = EBIT*(1-tx rate)Free Cash Flows = NOPAT - Investment in op. capitalActualProjectedStep 1: Calculate FCF20102011 1. Net operating working capital$127.20$134.90 2. Net plant and equipment375.00397.50 3. Net operating capital$502.20$532.40 4. Investment in operating capital30.20 5. NOPAT$61.50$65.16 6. Less: Investment in op. capital30.20 7. Free cash flow$34.96Free Cash Flows =

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