MasterExam2A-AnsKey

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Please use the DESIGNATED ANSWER SHEETS for your answers Do NOT copy over or delete the grading area on top of the answer Be make sure to link your answers in a way that makes it easy to gr ALL Calculations MUST BE SHOWN. No credit for answer only. Please link to the relevant information from a previous question if ap Tab Type Points Each Points Available Q1 2.5 Q2 2.5 Q3 2.5 Q4 2.5 Q5 2.5 Q6 2.5 Q7 2.5 Q8 2.5 Q9 2.5 Q10 2.5 Total 25 Please work in order of YOUR strength to maximize your po Please DO ALL CALCULATIONS IN EXCEL. SHOW ALL F ANSWER ONLY ON THE DESIGNATED SHEETS for each

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rs. They link to this summary. sheet. rade. Every question is worth 2.5 points. pplicable. Points Earned 0.0Name 0.0ID 0.0 BEFORE STARTING SAVE THE EXAM AS FirstNameLastNam 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 oints. FORMULAS, LINKS h question.
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Question 1 Question 2 Question 3 Question 4 Question 5 Question 6 Question 7 Do NOT Answer on This Sheet. Use the designated Answer Sheets ONLY as that will assist in grading and ensure grading equity. BEFORE you get started, save this exam as your First Name and Last Name The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is \$40,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net operating working capital of \$2,000. The computer would increase the firm's Gross Profit by \$20,000 per year but would also increase operating costs by \$5,000 per year. The computer is expected to be used for 3 years and then be sold for \$25,000. The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent. Create a comprehensive INPUT table indicating periods for cash flow items as well as INPUT numbers. What is the initial investment? Using the same information, linking to your INPUT table , what is the operating cash flow in year 2? And what is the total value of the terminal year non-operating cash flows at the end of year 3? Using the same information, linking to INPUTS or previous answers, what is the Net Present Value and should they go ahead? Using the included financials, and using history as source of assumptions, create a 3YEAR INPUT table for assumptions and forecast the NEEDED financial statement items ONLY for 3 years and determine the Annual Free Cash Flows for your assigned company. Company's WACC = 12%. Determine the Horizon Value for your assigned company (Link to previous question). If your FCF is negative use a valuation multiple from Yahoo Statistics (last tab) Determine the Value of operations for your assigned company. And calculate the value of equity and Market Value added. (Link to previous 2 questions)
Question 8 Question 9 Question 10 Foothill Entertainment, Inc. is considering an acquisition of Valley Shows Company. Foothill expects Valley’s NOPAT to be of \$9 million the first year with all depreciation cash flows reinvested to replace equipment and zero interest expense. For the second year, Valley is expected to have NOPAT of \$25

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