Do the terminal values support the merger? Looking at the numbers in the exhibit, do you think the merger should happen? Is it a good investment?

Hint: There will be three calculations: a preliminary calculation based on the case study, an expanded year valuation from four to seven years, and an expanded calculation from four to seven years including NWC.

Summary of Exhibit 7 Valuation of GE Appliances No TV No TV Revenue In Case No Capex No NWC Growth Terminal Value Capex NWC No Capex NWC 4 Years 7 Years 7 Years -1.00% 0.00% 1.00% $457 $718 $984 $1,254 $1,531 $1,812 -$80 $524 $984 $1,800 $2,475 $3,175 7 Years $12 $563 $1,158 $1,776 $2,416 $3,079 -$3,863 -$2,102 $249 $1,700 $3,752 $5,909 2.00% 3.00% 4.00% Summary of Exhibit 8 Valuation of GE Interest in Mabe Revenue Terminal In Case No Terminal Values Growth Values 7 Years 7 Years 1.00% 2.00% 3.00% $60 $128 $198 $254 $268 -$28 $135 $304 $445 $480 $394 $114 $648 $1,096 $1,211 3.80% 4.00% Extension of Exhibit 9 Value of Synergies In Case No Terminal Values Revenue Terminal Growth Values 0.00% $509 $1,019 $2,558 Summary of Exhibit 7 Valuation of GE Appliances No TV No TV Revenue In Case No Capex No NWC Growth Terminal Value Capex NWC No Capex NWC 4 Years 7 Years 7 Years -1.00% 0.00% 1.00% $457 $718 $984 $1,254 $1,531 $1,812 -$80 $524 $984 $1,800 $2,475 $3,175 7 Years $12 $563 $1,158 $1,776 $2,416 $3,079 -$3,863 -$2,102 $249 $1,700 $3,752 $5,909 2.00% 3.00% 4.00% Summary of Exhibit 8 Valuation of GE Interest in Mabe Revenue Terminal In Case No Terminal Values Growth Values 7 Years 7 Years 1.00% 2.00% 3.00% $60 $128 $198 $254 $268 -$28 $135 $304 $445 $480 $394 $114 $648 $1,096 $1,211 3.80% 4.00% Extension of Exhibit 9 Value of Synergies In Case No Terminal Values Revenue Terminal Growth Values 0.00% $509 $1,019 $2,558