In 2020, the management of Doyle and Doyle created a 2021 business plan to launch a new
Question:
In 2020, the management of Doyle and Doyle created a 2021 business plan to launch a new product into its nationwide market. Its 2021-2025 business plan calls for Doyle to make the following capital expenditures and changes in networking capital, depreciation, and interest for its horizon period 2021 through 2025 to support the rollout of its new product and to support its supply chain to its customers.
Doyle anticipates that sales and operating expenses will increase 10% annually for the years 2021 through 2025. After 2025, Doyle projects that its sales and operating expenses will grow at the rate of inflation of 3% annually. Depreciation and Interest will change according to the table above.
Doyle's most recent (2020) financial statements are:
Other financial information for Doyle:
Income tax rate on pre-tax income 25%
CAPM rate of return RHI’s stock investors require 12%
Pre-tax interest rate on debt 10%
Weighted average cost of capital 8%
On a spreadsheet separate INPUT and COMPUTATIONS sections that computes using spreadsheet references / formulas / and functions Doyle’s free cash flows (FCFs] for the horizon period 2021 - 2015 and the constant growth period that begins in 2026.
Suppose that you calculated for Doyle the following free cash flows for 2021 - 2025 and the constant growth period after 2025.
Create a well-formatted spreadsheet that estimates Doyle’s INTRINSIC VALUE per SHARE.
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso