We find the following information on NPNG (No-Pain-No-Gain) Inc.:

EBIT = $2,000,000

Depreciation = $250,000

Change in net working capital = $100,000

Net capital spending = $300,000

These numbers are projected to increase at the following supernormal rates for the next three years, and 5% after the third year for the foreseeable future:

EBIT: 20%

Depreciation: 10%

Change in net working capital: 15%

Net capital spending: 10%

The firm's tax rate is 35%, and it has 1,000,000 outstanding shares and $8,000,000 in debt. We have estimated the WACC to be 15%.

a.Calculate the EBIT, Depreciation, Changes in NWC, and net capital spending for the next four years.

b.Calculate the CFA* for each of the next four years, using the formula

CFA* = EBIT(1 - T) + Depr - NWC - NCS.

c.Calculate the firm's share price at time 0.