Question: 1.- How could you use a DCF-based estimate for the practice value? 2- Based on case exhibit 3, what is the free cash flow expected

1.- How could you use a DCF-based estimate for the practice value?

2- Based on case exhibit 3, what is the free cash flow expected for each year?

3- How would you estimate a terminal value for the practice in 2023?

Please can you help me filling out the orange cells?

1.- How could you use a DCF-based estimate for

Exhibit 3 Mary Washington Pediatrics Atwood's Financial Forecast for Mary Washington Pediatrics financial figures in thousands of US dollars) 2016 2017 2018 2019 2020 2021 2022 2023 Revenue growth 0.5% 3.0% 5.0% 5.0% 5.0% 3.0% 3.0% 2.0% Operating expenses/ revenue 57.4% 57.4% 57.0% 56.5% 56.0% 54.0% 53.0% 53.0% Net working capital 315.9 272.1 214.2 176.5 181.9 185.5 189.2 193.0 Net equipment 326.3 375.1 415.1 455.1 475.1 198.2 484.2 464.6 Depreciation 10.4 14.0 20.0 28.0 37.0 42.0 42.9 42.9 Capital expenditures 4.1 52.8 60.0 68.0 57.0 65.1 28.9 23.3 Net revenue 1,555 1,602 1,682 1,766 1,854 1,910 1,96 2,007 Operating expenses 893 920 959 998 1,038 1,031 1,043 1,064 Depreciation 10.4 14.0 20 28 37 42 43 43 Physician salary 485.44 500 525 551 579 596 614 626 Operating profit 166 168 178 189 200 240 268 274 Source: Created by author. DCF Valuation Discount Rate 9% Tax Rate 32% Term Growth Rate (exp. Infli 1.50% Net Working Capital (NWC) Turnover 4.9 5.9 10.0 10.2 10.3 10.4 10.4 Equipment Turnover 1 8 4.3 4.1 3.9 3.9 3.8 4. 4.3 Capex 62.8 60.0 68.0 57.0 65.1 28.9 23.3 NOPAT 114 121 129 136 163 182 186 - Change in NWC -44 -58 38 5 4 4 Change in net equipment 63 60 68 57 65 29 23 Free Cash Flows 95 119 98 74 95 149 159 2273 Free cash flow + terminal value 95 119 98 74 95 2423 Enterprise value Terminal Value (constant growth of 1.5%) Terminal Value (no growth) Terminal Value (EBIT multiple = 1.5) Terminal Value (book value) Terminal Value 2273

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