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Compute the Adjusted Present Value.The buyer wants cash flows evaluated for 20 years and assumes a terminal value a $50 M to be discounted at 15%. Ignore taxes.Annual cash flow from product line expansion $ 7 M. Discount at 18%.Annual cash flow from tax savings $ 7 M. The interest rate on debt is 6% and the tax rate is 40%. You do not need to calculate a terminal value for tax savings.Annual casAt the end of 10 years, Grokster Investments plans to sell its interest in One City Tower, an office building in Miami, FL. In year 10 the building is expected to generate an annual cash flow of $75 million that is expected to grow at an annual rate 4% forever. The discount rate for projects such as this is 12%. Calculate the terminal value at the end of the 10th year.FCF (forecast free cash flow at end of explicit forecast period)g (steady growth rate - the long term growth)Given the following data from Swamp & Sand Industries, calculate the NI. The tax rate is 30%.??????? ?? ??????= (1−〖(1)+?〗^(−?))/?
400SGA313Depreciation1195NWC15CapEx132148Dividends20tax rate30%Note SGA does not include depreciation211 Revenue-Cost of Sales - SGA - Dep - Int Expense 63 -Taxes148X1X2100145Ignore cash230241Inventories450483Payables300323Debt140252Ignore debtRemember a negative NWC is a source of cash and reduces the need for financing.X1X2NWC = assets - liabilities3804012121TV = (D*Kd*T)/(Kd-g)Debt $138.00 Cost of Debt4%Tax Rate30%3%Terminal Value166Cost of Sales Revenue -Cost of Revenue - SGA - Depreciation - Interest Expense - Taxes = Net IncomeInterest ExpenseSwamp & Sand Industries has the following data. Calculate its Net Working Capital (NWC) adjustment for cash flow in year X2.Cash Receivables Receivables +Inven-Payables = NWC X2 -Chg NWCCalculate the terminal value of the tax shield given the following information. Assume we are calculating it for the next year (that is, assume there is no planning period, just a terminal value). The tax rate is 30%. Debt will be $138 million. Assume debt grows at the same annual rate as the firm which is 3%. The cost of debt is 4% while the cost of equity is 12%.g (steady growth rate - the long term growth)Swamp & Sand Industries has the following data for the coming year. Free cash flow, cash, and debt are constant. Terminal value is 3 times FCF. The discount rate is 13%. Calculate its Enterprise Value.
133118 FCF/1+RCash29353 FCF Terminal /1+RDebt280471 118+353Discount Rate13%471Sales1052400SGA314Depreciation952435170.1Change NWC16160.1CapEx89Dividends32Note SGA does not include depreciationFCF = EBIT * (1-T) + noncash expenses - (capital expenditures + change in net working capital) EBIT (Operating Income) 33895T (tax rate - not the dollar amount of taxes)30%CAPEX89FCF = EBIT -Taxes +Dep -Chg NWCChange in Net Working Capital 16160FCF Free Cash Flow Enterprise Value is the discounted value of FCF and Terminal Value. In this case since it is only one year. FCF*(1+3)/(1+DR)Given the following data from Swamp & Sand Industries, calculate the FCF (Free Cash Flow). The tax rate is 30%.