can you explain step by step how to compute the npv and get 264.7655

8) Use the table for the question() below. FCF Forecast ($ million) Year 4. Sales 240 270 290 310 325.5 5.0% Growth versus Prior Year 12.5% 7.4% 6.9% EBIT (10% of Sales) Less: Income Tax (37%) Less Increase in NWC (12% of Change in Sales Free Cash Flow 29.00 10.73 27.00 31.00 32.55 (9.99) 3.6 11.47 12.44 24 2.4 186 18.65 13.41 15.87 17.13 Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to an industry growth rate of 5% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. If Banco industries has a weighted average cost of capital of 11%, $50 million in cash, S80 million in debt, and 18 million shares outstanding, which of the following is the best estimate of Banco's stock price at the start of year 1? A) $6.52 B) $11.74 C) $13.04 D) $23.48 Answer. C Explanation: C) FCF5 - S18.65 million (1+ 0.05) $19.5825 million; V4 - S19.5825 million / (0.11 - 0.05) $326.38 million; using a financial calculator, Vo- $264.7655 million3; Po- ($264.7655 million + 50 - 80) / 18 million = $13.04 Diff 2 Var: 50. Show transcribed image text Expert Answer Anonymous answered this 18,763 answers Was this answer helpful? First add 1 and 0.05, we get 1.05, multiply 1.05 by 18.65 we get 19.5825.Write it down. Subtract 0.05 from 0.11 we get 0.06.Write it down. Divide 19.5825 by 0.06 we get 326.38 CFO-13.41, CF1-15.87,CF2-17.13.CF4-18.65+326.38.Compute NPV We will get 264.7655 Add 264.7655 with 50 and subtract 80 we will get 234.7655 write it down divide 234.7655 by 18 we will get 13.04