Part 1: What is quantity 6, 7, 8, and 9 (shown in a green-background cell)?

Part 2: Based on your answer for quantity 7, should the team consider going ahead with this project? Choose one answer and one reason.

A) Yes

B) No

C) Because NPV

D) Because NPV > 0

E) Because the team cannot make a final determination without analyzing out-of-model considerations.

F) Not enough information is provided to answer this question.

Given Constants PRE IM 3.00% 6.00% 0.6000 Bu BL 1.1670 Existing As purchased $150.0 $150.0 PP(D+E) Financing Structure = D + E = CAP tot = Market's view of Enterprise Value D/(D + E) = WD D 60.0% 0.0% $0.0 $150.0 1 E 2 Key Rates Income Tax rate Existing As purchased 37.000% 37.000% 7.000% 8.000% TE 4.800% 6.501% rwacC 4.800% 5.62440% Free Cash Flows FCF (D+E) = NOPAT - A Working Capital + Deprec - CAPX Partial Income Statement, NOPAT and FCFS ($MM UON) Revenue - Depreciation - Other Expenses = EBIT - Tax on EBIT = NOPAT Existing D = $0.0 $100.00 ($60.00) ($30.00) $10.00 ($3.70) $6.30 As Purchased $100.00 ($60.00) ($30.00) $10.00 3 4 - A Working Capital + Depreciation $0.00 $60.00 ($60.00) $6.30 $0.00 $60.00 ($60.00) 5 - CAPX - FCFD+E) Valuation at T=0 Sp(D+E) = Resale price of stock plus loan principal repayment 6 PV (D+E) = Team's estimate of Enterprise Valuue 7 PP(D+E) 8 = Purchase price (stock + loan) = Market's view of Enterprise Value NPV (D+E) 9 Given Constants PRE IM 3.00% 6.00% 0.6000 Bu BL 1.1670 Existing As purchased $150.0 $150.0 PP(D+E) Financing Structure = D + E = CAP tot = Market's view of Enterprise Value D/(D + E) = WD D 60.0% 0.0% $0.0 $150.0 1 E 2 Key Rates Income Tax rate Existing As purchased 37.000% 37.000% 7.000% 8.000% TE 4.800% 6.501% rwacC 4.800% 5.62440% Free Cash Flows FCF (D+E) = NOPAT - A Working Capital + Deprec - CAPX Partial Income Statement, NOPAT and FCFS ($MM UON) Revenue - Depreciation - Other Expenses = EBIT - Tax on EBIT = NOPAT Existing D = $0.0 $100.00 ($60.00) ($30.00) $10.00 ($3.70) $6.30 As Purchased $100.00 ($60.00) ($30.00) $10.00 3 4 - A Working Capital + Depreciation $0.00 $60.00 ($60.00) $6.30 $0.00 $60.00 ($60.00) 5 - CAPX - FCFD+E) Valuation at T=0 Sp(D+E) = Resale price of stock plus loan principal repayment 6 PV (D+E) = Team's estimate of Enterprise Valuue 7 PP(D+E) 8 = Purchase price (stock + loan) = Market's view of Enterprise Value NPV (D+E) 9