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Exam 3 Workbook
Magnification must remain around 180% during the exam 3 $2,212. $2,098. diff $113. 6755
4 sales 25000000 28000000 inc 0. asset 960000 lia 360000 re 431200 afn 168800 10 0 -1200 - 1 200 800 2 300 400 3 600 300 4 900 100 wacc 10% irr 18% 24%
11 0 (150,000.00) (150,000.00) - 1 80,000.00 - 80,000. 2 (25,000.00) (25,000.00) - 3 50,000.00 - 50,000. 4 80,000.00 - 80,000. 5 (30,000.00) (30,000.00) - 6 75,000.00 - 75,000. wacc 16% reinv 25% npv (6,897.61)
neg (182,862.46)
npv $72,651. fv $115,794. pv $72,651. $11,151. 15
wacc 10% npv og 767. new npv 806. diff 38. 17 0 - 1 3000 2 3000 3 3000 4 3000 5 3000 6 3000 7 3000 pos inf 3% wacc 9%
pv 51500 neg inf 0. rate 0. pv -35696. npv 15803. 18 21 sales var cm 16100000 fixed - ebit 9600000 ebt 9600000 ni 5760000 dfl 1 tl 1. inc 0. new ni 7305600 eps 8. 22 30%^ 20$ 23 24 ebit 2,500,000 2,500,000 no ant ebt 2,500,000 2,350, ni 1,500,000 1,410, rs 7.00% 0. rf 2% 2% mrp 5% 5% beta 1 1. val 21428571.4286 16928571. shares 300000 price 71. price inc 10 ant price 81.4285714286 86. debt 7500000 16928571.
rf 4%
Sales this year Sales next year Sales increase projected for the coming year Net income this year Dividend payout rate (all years) Spontaneous Assets Spntaneous Liabilities AFN Eq: AFN = (A/S0)(∆S) - (L/S0)(∆S) - (PM)(S1)(1-DPR)
Income Statement Year 0 Sales $40,000,000.00 $48,000,000.00 $48,000,000. Operating Costs ($26,000,000.00) ($34,080,000.00) ($34,080,000.00) Depreciation ($1,500,000.00) ($1,700,000.00) ($1,700,000.00) EBIT $12,500,000.00 $12,220,000.00 $12,220,000. Interest ($280,000.00) ($280,000.00) ($395,353.60) EBT $12,220,000.00 $11,940,000.00 $11,824,646. Taxes (40%) ($4,888,000.00) Net Income $7,332,000.00 $7,164,000.00 $7,094,787. Dividends Paid Out $2,932,800.00 $3,725,280.00 $3,689,289. Assets Year 0 Cash $4,000,000.00 $4,800,000. Accounts Receivable $12,000,000.00 $14,400,000. Inventories $16,000,000.00 $19,200,000. Current Assets $32,000,000.00 $38,400,000. Gross Plant & Equipment $15,000,000.00 $17,000,000. Less: Depreciation ($6,000,000.00) ($7,700,000.00) Net Plant & Equipment $9,000,000.00 $9,300,000. Total Assets $41,000,000.00 $47,700,000.00 $47,700,000. Liabilities & Equity Year 0 Accounts Payable $10,000,000.00 $12,000,000.00 $12,000,000. Notes Payable $1,500,000.00 $1,500,000.00 $1,961,280. Accruals $4,000,000.00 $4,800,000.00 $4,800,000. Current Liabilities $15,500,000.00 $18,300,000.00 $18,761,280. Long-Term Debt $2,000,000.00 $2,000,000.00 $2,000,000. Common Stock $19,800,000.00 $19,800,000.00 $19,800,000. Retained Earnings $3,700,000.00 $7,138,720.00 $7,105,498. Total Liabilities & Equity $41,000,000.00 $47,238,720.00 $47,666,778. Additional Funds Needed $461,280.00 $33,221. Year 1 (1st) Year 1 (2nd) Year 1 (1st) Year 1 (2nd) Year 1 (1st) Year 1 (2nd)
Time 0 1 2 3 4 5 Machine Depr % Depr Amount Book Value NOWC Revenue
- Op Costs
- Depr EBIT
- Taxes NOPAT
- Depr OCF Synergies FCF WACC NPV IRR
Selling (Salvage) Price Op Cost %
200 Numbers may not 300 match your problem 400 400 400 500 600
- 400 500 600 600 600 700 800 Average CFs WACC IRR NPV
Call Option T=0 T=1 X = 90 Numbers may not match your problem $110 $ $ $57 $ Rf 3.5% R-N Up 0. R-N Price ### Replicating Portfolio s 0. B ### RP Price ###
Numbers may not match your problem
Tax Rate 40% 4% MRP 10% Numbers may not match your problem EBIT $ 10,000,000.00 $ 10,000,000.
- Int $ - $ (400,000.00) EBT $ 10,000,000.00 $ 9,600,000.
- Taxes $ (4,000,000.00) $ (3,840,000.00) NI $ 6,000,000.00 $ 5,760,000.00 ROA 14.46% Lev Eff 3.32% Beta 1.20 1.42857142857143 T.S. 0.51% Req Ret 16.00% 18.29% 18.29% Value (Equity) $ 37,500,000.00 $ 31,500,000. Shares 2,000,000 1,518, Price $ 18.75 $ 20.75 Price Debt $ 10,000,000. Tax Shield $ 4,000,000. Assets $ 37,500,000.
- Debt $ (10,000,000.00) Equity $ 31,500,000. Price incr $ 2. Ant. Price $ 20. Ret Shares 481,927. Tax Rate MRP Numbers may not match your problem EBIT
- Int EBT
- Taxes NI Beta Req Ret Value (Equity) Risk-Free (& KD) Risk-Free (& KD)
