7 Base year Fade rate Yr. 10 and after Note: Fade rate is the year-to-year reduction in the rate to some steady state rate 8 Sales growth (gross): 1.45 0.04 1.05 Year 1 growth (grosss) = 1.41, year 2 growth (gross) =1.37, etc. 9 Operating PM 20% 1% 10% 10 Fixed capital investment rate 20% Note: on a per $ of sales basis 11 WC inv rate 10% Note: on a per $ of sales basis 12 Cash tax rate 21% 13 COC 12% 14 Market securities $15,000 15 Debt $50,000 16 # shares outstanding 10,000,000 17 18 (all dollars in thousands) 19 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Residual 20 Sales $282,000.00 $386,340.00| $513,832.20 21 Operating Profit 22 NOPAT 23 New Investment 24 Add'l WC 25 Free cash flow 26 PV to year 10 27 Pv after year 10