Buckeye Computers Valuation Problem Set Instructions: You should submit an electronic copy of your excel solution on Canvas. You must upload your solution by 8:30 am on the day on which they are due. If submitted late, the problem set submission will not be accepted. The problem sets should be prepared individually, but you are allowed to discuss the related concepts with your learning team. Your solution should be formatted and laid out so that it is easy to read and clearly shows your work, the logic behind your answers, and any assumptions you made in the analysis. Conduct your valuation on December 31 2020. Take all data as referring to values at the end of each calendar year. Your goal is to estimate and value the FCFs that start in 2021 and onwards. Buckeye Computer, Inc. (BCI) is introducing a new line of image generators and visual workstations in 2021. BCI's revenues should grow by 15% per year through 2025. The line should yield operating profit margins (i.e., EBIT/Sales) of 14%.' Because of rapid technological change in the industry, the product life cycle of the workstations is no more than five years. As a result, at the beginning of 2026, BCI will introduce the second generation of workstations with fully integrated image generators based on research already underway. The second line is predicted, on average, to yield growth in revenue of 6% and operating profit margins of 12% starting in 2026 and lasting into the indefinite future [To be clear: Sales growth from 2025 to 2026 is 6% and this growth rate will be maintained from then on]. Other forecast ratios for BCI are given in Exhibit 2. BCI's past financial statements are shown in Exhibit 1. The current rate of interest on risk-free 30-day treasury bills is 4.8%. The yield on 10-year treasury bonds is 6.2%. Other companies that produce similar high-performance image generators and visual workstations have, on average, equity betas of 0.9523. These firms have no net debt. Buckeye itself has an equity beta of 1.10. You will be evaluating the purchase of Buckeye Computer, whose equity currently (end of 2020) has a market value of approximately $2,900 million (50 million shares at $58 each). NOTE: Exhibits are also posted in a separate Excel file These forecasts are the same as the one you used for Buckeye 1 Problem Set to project free cash flows for 2021- 2025