Question: Please help me solve all 5 parts in Excel. i would like to know the answer and the formula u used. Intro Tennessee Whiskey is

Intro Tennessee Whiskey is a U.S. producer of alcoholic drinks. The company is evaluating opening a new distillery in Scotland for serving the British market. The project will last four years, after which the distillery will be sold. The company has estimated the following data: - Initial investment required: 80 million - After-tax salvage value in year 4:48 million - Annual depreciation: 8 million - British income tax rate: 32% - Fraction of after-tax income remitted to parent: 100% - Withholding tax rate imposed by Britain: 0% - Stock beta: 0.6 - Bond interest rate: 4% - Target capital structure: 90% equity and 10% debt - U.S. tax rate: 21% - Treasury bond yield: 2% - Expected return on the S\&P 500: 5% The company expects the following revenue, costs, depreciation and exchange rates: Part 1 - Attempt 8/10 for 10 pts. What is the free cash flow to the subsidiary in year 3 , including the after-tax salvage value of the distiliery (in million)? What is the free cash flow to the parent in year 3 (in $ million)? Part 3 What is the cost of equity? Part 4 What is the weighted average cost of capital? Part 5 What is the NPV of the project (in \$ million)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
