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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