fin630 session2 hw

Aug 12th, 2016
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Session2 homework1

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PROBLEM 2-3GivenGrowth rate for years 1-5EBIT (1)CAPEX for year 0Depreciable lifeTax rateNew working capital for years 1-5$$Solution Legend= Value given in problem= Formula/Calculation/Analysis required= Qualitative analysis or Short answer required= Goal Seek or Solver cell= Crystal Ball Input= Crystal Ball Output5%100,000400,0005 years30%20% of new EBITSolution2015EBITTaxesNOPATPlus: DepreciationLess: CAPEXLess: New working capital needs (Note 1)Plus: Salvage value of the fixed assets inyear 5 (assumed to equal its book value)(Note 2)Firm Free Cash Flow (FFCF)$$(400,000)(20,000)$(420,000) $2016100,000 $(30,000)70,000 $80,000Year2017105,000 $(31,500)73,500 $80,0002018110,250 $(33,075)77,175 $80,0002019115,763 $(34,729)81,034 $80,000(1,000)(1,050)(1,103)(1,158)149,000$152,450$156,073$Net Fixed A

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