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Enterprise Valuation & Terminal Value
Given							Solution Legend
Gross Margin	40%						Value given in problem
Fixed Costs	$ 2,000						Formula/Calculation/Analysis required
Revenue Growth Rate for Years 1 - 5	10%						Crystal Ball Input
FCF Steady Growth	3%						Crystal Ball Output
Discount Rate	12%
Year 1 Revenue	$ 5,000
Tax Rate	35%
Terminal Year	5
		1	2	3	4	5
Revenues		$ 5,000	$ 5,500	$ 6,050	$ 6,655	$ 7,320.50
Gross profits		2,000	2,200	2,420	2,662	2,928.20
Fixed Costs		2,000	2,000	2,000	2,000	2,000
Net Operating Income		$ -	$ 200	$ 420	$ 662	$ 928
Taxes		$ -	$ 70	$ 147	$ 231.70	$ 324.87
Free Cash Flow		$ -	$ 130	$ 273	$ 430	$ 603
Revenue growth rate= 10 + (10*0.10)	0.11
Revenues		$ 5,000	$ 5,550	$ 6,160.50	$ 6,838	$ 7,590.35
Gross profits		$ 2,000	$ 2,220	$ 2,464.20	$ 2,735	$ 3,036.14
Fixed Costs		$ 2,000	$ 2,000	$ 2,000	$ 2,000	$ 2,000
Net Operating Income		$ -	$ 220	$ 464	$ 735	$ 1,036
Taxes		$ -	$ 77	$ 162.47	$ 257.34	$ 362.65
Free Cash Flow		$ -	$ 143	$ 302	$ 478	$ 673
ANSWER THESE BELOW ! SHOW ALL WORK FOR EXCEL USE PLEASE
NPV for Years 1-5 Cash Flows
Terminal Value (as of Year 5)
PV of Terminal Value
Enterprise Value
PV of Terminal Value / Enterprise Value