Question: NOTE PLEASE ONLY ANSWER QUESTION 8,9,10 Questions 5-10 are based on the following information: You are considering buying a company using leveraged buyout. The company

 NOTE PLEASE ONLY ANSWER QUESTION 8,9,10 Questions 5-10 are based on

NOTE PLEASE ONLY ANSWER QUESTION 8,9,10

Questions 5-10 are based on the following information: You are considering buying a company using leveraged buyout. The company is projected to have sales of 500 million each year in the three years after buyout. The cost of sales and other administrative expenses are 60% of the sale. Depreciation and amortization are 5% of the sale. Tax rate is 40%. Suppose that the change in net working capital and capital expenditure each year is zero. If you borrow 1.5 billion at interest rate of 8% per year, and you use all the cash flow to repay debt. What is the EBITDA in the first year after the buyout? (Enter the number in millions.) 200000000 QUESTION 6 What is the interest expense in the first year after the buyout? 120000000 QUESTION 7 What is the net income in the first year after the buyout? 33000000 QUESTION 8 How much debt can you retire in the first year? (Enter the number in milions.) QUESTION 9 How much debt can you relire in the second year? (Enter the number in millions.) QUESTION 10 What is the debt level two years after buyout?(Enter the number in milions.)

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