Ch_09_Firm_And_Project_Val

Ch_09_Firm_And_Project_Val - FIRM AND PROJECT VALUATION...

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Five Equivalent Methods Inputs Valuation Object 1 Date 0 Proj Investment or Firm Cap $360.00 Tax Rate 40.0% Unlevered Cost of Equity Capital 10.0% Riskfree Rate=Cost of Riskfree Debt 3.0% Inf Horiz Growth Rate of Unlev Equity 5.0% Include Infinite Horizon? 1 Cash Flows 2nd Stage: First Stage: Finite Horizon Infin Horiz Date 0 1 3 4 5 6 Revenues $620.00 $655.00 $675.00 $740.00 Expenses $445.00 $470.00 $470.00 $475.00 Gross Earnings $175.00 $185.00 $205.00 $265.00 Depreciation $60.00 $60.00 $60.00 $60.00 $85.00 Earnings Bef Interest & Tax (EBIT) $115.00 $125.00 $145.00 $180.00 Interest Expense ($20.00) ($35.00) ($55.00) ($65.00) ($85.00) ($95.00) Earnings Before Tax $100.00 $130.00 $170.00 $190.00 $230.00 $275.00 Taxes $40.00 $52.00 $68.00 $76.00 $92.00 $110.00 Earnings $60.00 $78.00 $102.00 $114.00 $138.00 $165.00 Add Back Depreciation $60.00 $60.00 $60.00 $60.00 $60.00 $85.00 Cash Flow from Operations $120.00 $138.00 $162.00 $174.00 $198.00 $250.00 New Invest in Plant and Equipment ($30.00) ($30.00) ($30.00) ($30.00) ($30.00) ($30.00) After-Tax Salvage Value $0.00 New Invest in Working Capital ($10.00) ($10.00) ($10.00) ($10.00) ($10.00) ($10.00) Cash Flows from Investments ($40.00) ($40.00) ($40.00) ($40.00) ($40.00) ($40.00) New Borrowing (Repayment) $5.00 $5.00 $5.00 $5.00 $5.00 Free Cash Flow to Equity (FCFE) $85.00 $103.00 $127.00 $139.00 $163.00 $210.00 = Dividends $85.00 $103.00 $127.00 $139.00 $163.00 $210.00 F IRM A ND P ROJECT V ALUATION Firm Project Valuation Object Yes No Infinite Horiz
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Interest ($20.00) ($55.00) ($65.00) ($85.00) ($95.00) Less New Borrowing (Repayment) ($5.00) ($5.00) ($5.00) ($5.00) $0.00
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Ch_09_Firm_And_Project_Val - FIRM AND PROJECT VALUATION...

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