please give step by step in excel solution

Mergers and Acquisitions Lavender Repair Company, a regional hardware chain that specializes in "do it yourself" materials and equipment rentals, is cash rich becatuse of several consecutive good years. One of the alternative uses for the excess funds is an acquisition. Doug Zona, Lavender's treasurer, and your boss, has been asked to place a value on a potential target, Lyons Lighting (LL), a chain that operates in several adjacent states, and he has enlisted your belp. The table below indicates Zona's estimates of L.L's earnings potential if it came under Lavender's management (in millions of dollars). The interest expense listed bere includes the interest: (1) on LL's existing debt, which is S million at a rate of 9%, and (2) on new debt expected to be issued over time to belp finance expansion within the new L division," the code name given to the target firm. If acquired, L. will face a 35% tax rate. Security analysts estimate LL's beta to be X. The acquisition would not change Lyons' capital structure, which is 22% debt. Zona realizes that Lyons Lighting's business plan also requires certain levels of operating capital and that the annual investment could be significant. The required levels of total net operating capital are listed in the table. Zona estimates the risk-free rate to be 7.2% and the market risk premium to be 4.75%. He also estimates that free cash flows after 2020 will grow at a constant rate of Z%. Lavender's management is new to the merger game, so Zonil has been asked to answer some basic questions about mergers as well as to perform the merger analysis. To stnacture the task, Zona has developed the following questioes, which you must answer and then defend to Lavender's board d. Use the data developed in the table to construct the L division's free cash flows for