forecast the next 5 years of the income statement (including the Free Cash Flow) using the following
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Question:
- forecast the next 5 years of the income statement (including the Free Cash Flow) using the following assumptions:
Sales will grow by 13% each year.
COGS and SG&A will be forecast using the percent of sales technique.
Depreciation will grow by 9% each year. ? Interest expense will grow by 11% each year.
Flitwick's tax rate is 31%.
CapEx and Change in NWC will grow by 12% each year.
At the end of year 5, you will sell the company for $40,000,000 (note: this number should be added to the year 5 free cash flow).
The appropriate discount rate is 16%.
Once you've estimated the free cash flows, find the value of the firm (i.e. the present value of the free cash flows.)
Related Book For
Intermediate Financial Management
ISBN: 9780357516669
14th Edition
Authors: Eugene F Brigham, Phillip R Daves
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