1. a. Use the data below to compute 2014 OCF (Operating Cash Flow)

b.compute the change in NOWC (Net Operating Working Capital)

c. compute the change in Gross Fixed Assets (i.e. Change in Gross property, plant & equipment)

d. compute 2014 FCF (Free Cash Flow)

	2014	2013
Cash	15	17
Short-term investments	9	68
Accounts receivable	370	316
Inventories	553	417
Property, plant & equipment (net)	927	871
Accounts payable	47	32
Short-term debt	98	64
Accrued liabilities	148	135
Long-term debt	661	583
Common stock	130	130
Retained earnings	771	713
Net revenue	3143	2853
Depreciation expense	114	92
Interest	92	60
Taxes	81	81
Net income	255	123

(Round to the nearest whole dollar)

2. Assuming there is no end to the timeline and the following data:

Cost of equity = 17.64%

Cost of debt = 7.38%

Debt = $577MM

Equity = $1249MM

Tax rate = 40%

Long-term growth expectations = 3.1%

Future dividends are forecast as follows:

Year 0: n/a

Year 1: 128

Year 2: 148

Year 3: 162

Year 4: 176

Year 5: 183

a. Computetthe correct discount rate?

b. Compute the Terminal Value

3. Value the following scenario, assuming there is no end to the timeline and the following data:

Cost of equity = 15.23%

Cost of debt = 6.71%

Debt = $578MM

Equity = $1246MM

Tax rate = 40%

Long-term growth expectations = 3.8%

Future dividends are forecast as follows:

Year 0: n/a

Year 1: 129

Year 2: 146

Year 3: 165

Year 4: 176

Year 5: 182

(Round your answer to the nearest cent)

(Enter your answer as a percent with 2 decimal places but without the % symbol. For example, if you compute 25.00%, enter 25.00)