2-5 Steve's Sub Shop
Given
Incremental revenue growth for years 1-5
Revenues (current)
Incremental Revenues
CAPEX for year 0
CAPEX for years 1-5
Maintenance expense for years 1-5
Depreciable life of ovens
Depreciation Expense
Tax rate
Discount Rate
10.0%
PROBLEM 8-1
Given
Sale price
Square footage
Selling price/sq ft
Time on the market
Comp #1
$240,000.00
2,240
$107.14
61 days
Solution
a.
Average price per square foot
Estimated Value
b.
c.
Solution Legend
Comp #2
2121 Tartar Circle
$265,000.00
3,000
2,145
PROBLEM 10-1
Given
Assets (Invested Capital)
Borrowing rate
Return on Invested Capital
Good state
Bad state
Capital Structures
Alternative #1
Alternative #2
Solution Legend
$1,500,000.00
9.00%
= Value given in problem
= Formula/Calculation/Analysis requir
PROBLEM 8-1
Given
Sale price
Square footage
Selling price/sq ft
Time on the market
Comp #1
$240,000.00
2,240
$107.14
61 days
Solution
a.
Average price per square foot
Estimated Value
b.
c.
Solution Legend
Comp #2
2121 Tartar Circle
$265,000.00
3,000
2,145
Solution Legend
Toy Co. Enterprise DCF Valuation
Valuation analysis of a strategic merger & acquisition - Mini-case
Setting:
It is January 2010 and as the Chief Executive Officer of TM Toys Inc. you are
evaluating a strategic acquisition of Toy Co. Inc. T
PROBLEM 6-1
Solution Legend
= Value given in problem
= Formula/Calculation/Analysis required
= Qualitative analysis or Short answer required
= Goal Seek or Solver cell
= Crystal Ball Input
= Crystal Ball Output
PROBLEM 6-2
Solution Legend
= Value given in
PROBLEM 3-1: Clayton Manufacturing Company
Given
EBITDA (Year 1)
Growth Rate in EBITDA
Initial investment
Depreciation (Straight line) over
Estimated salvage value
Tax rate
Cost of capital
Solution Legend
$200,000
5%
$800,000
5 years
$35%
12%
= Value give
PROBLEM 3-1: Clayton Manufacturing Company
Given
EBITDA (Year 1)
Growth Rate in EBITDA
Initial investment
Depreciation (Straight line) over
Estimated salvage value
Tax rate
Cost of capital
Solution Legend
$200,000
5%
$800,000
5 years
$35%
12%
= Value give
PROBLEM 8-1
Given
Sale price
Square footage
Selling price/sq ft
Time on the market
Comp #1
$240,000.00
2,240
$107.14
61 days
Solution
a.
Average price per square foot
Estimated Value
b.
c.
Solution Legend
Comp #2
2121 Tartar Circle
$265,000.00
3,000
2,145
PROBLEM 8-1
Given
Sale price
Square footage
Selling price/sq ft
Time on the market
Comp #1
$240,000.00
2,240
$107.14
61 days
Solution
a.
Average price per square foot
Estimated Value
b.
c.
Solution Legend
Comp #2
2121 Tartar Circle
$265,000.00
3,000
2,145
PROBLEM 8-1
Given
Sale price
Square footage
Selling price/sq ft
Time on the market
Comp #1
$240,000.00
2,240
$107.14
61 days
Solution
a.
Average price per square foot
Estimated Value
b.
c.
Solution Legend
Comp #2
2121 Tartar Circle
$265,000.00
3,000
2,145
Problem 9-11a-e
Given
Solution Legend
Growth rate in revenues and expenses
Debt (year 0)
Interest rate
Tax rate
Net working capital / Revenues
4.00%
$125 million
6.00%
34.00%
30.00%
= Value given in problem
= Formula/Calculation/Analysis required
= Qualit
Toy Co. Enterprise DCF Valuation
Valuation analysis of a strategic merger & acquisition - Mini-case
Setting:
It is January 2010 and as the Chief Executive Officer of TM Toys
Inc. you are evaluating a strategic acquisition of Toy Co. Inc. Toy
Co. Inc. desi
PROBLEM 3-3ab: Bridgeway Pharmaceuticals
Given
Investment cost (today)
Project life
Depreciation expense
Waste disposal cost savings per year
Labor cost savings per year
Sale of reclaimed waste
Required rate of return
Tax rate
Solution Legend
$(400,000)
5
PROBLEM 7-1
a.
b.
Solution Legend
= Value given in problem
= Formula/Calculation/Analysis required
= Qualitative analysis or Short answer required
= Goal Seek or Solver cell
= Crystal Ball Input
= Crystal Ball Output
PROBLEM 7-2
Given
Tax rate
Cost of Cap
"Southwest Ventures is considering an investment is an Austin, Texas-based start firm called Creed and Company. Creed and Company is involved in organic gardening and has developed a
complete line of organic products for sale to the public that ranges fro
PROBLEM 10-5
Given
EBITDA 2009
Added EBITDA
Funding need
VC's required rate
Rate on convertible debt
Term
EBITDA multiple
EBITDA growth rate
Solution Legend
$4,000,000
1,000,000
5,800,000
25.0%
8.0%
5
years
5
20.0%
= Value given in problem
= Formula/Calcu
"Southwest Ventures is considering an investment is an Austin, Texas-based start firm called Creed and Company. Creed and Company is involved in organic gardening and has developed a
complete line of organic products for sale to the public that ranges fro
2-5 Steve's Sub Shop
Given
Incremental revenue growth for years 1-5
Revenues (current)
Incremental Revenues
CAPEX for year 0
CAPEX for years 1-5
Maintenance expense for years 1-5
Depreciable life of ovens
Depreciation Expense
Tax rate
Discount Rate
10.0%
Problem 9-9
Given
Solution Legend
Years
Sales
Operating income (Earnings Before Interest and Taxes)
Less: Cash tax payments
Net operating profits after taxes (NOPAT)
Plus: Depreciation expense
Less: Investments
Net Working Capital
New Capital (CAPEX)
Tota
This exam is open book and is to be your individual work ONLY. You are not allowed to consult with anyone in answering the questions. Before starting your work,
please sign the statement below. If you have questions about the exam, please post them in the
PROBLEM 2-1
Discountrate
a.
b.
c.
d.
Given
Solution Legend
Solution:
10%
CashFlow
Year(s)
$500
$500
$500
$500
PresentValue
5
5
50
100
= Value given in problem
= Formula/Calculation/Analysis required
= Qualitative analysis or Short answer required
= Goal S
Problem 9-9
Given
Solution Legend
Years
Sales
Operating income (Earnings Before Interest and Taxes)
Less: Cash tax payments
Net operating profits after taxes (NOPAT)
Plus: Depreciation expense
Less: Investments
Net Working Capital
New Capital (CAPEX)
Tota
PROBLEM 10-5
Given
EBITDA 2009
Added EBITDA
Funding need
VC's required rate
Rate on convertible debt
Term
EBITDA multiple
EBITDA growth rate
Solution Legend
$4,000,000
1,000,000
5,800,000
25.0%
8.0%
5
years
5
20.0%
= Value given in problem
= Formula/Calcu
This exam is open book and is to be your individual work ONLY. You are not allowed to consult with anyone in answering the questions. Before starting your work,
please sign the statement below. If you have questions about the exam, please post them in the
PROBLEM 10-5
Given
EBITDA 2009
Added EBITDA
Funding need
VC's required rate
Rate on convertible debt
Term
EBITDA multiple
EBITDA growth rate
Solution Legend
$4,000,000
1,000,000
5,800,000
25.0%
8.0%
5
years
5
20.0%
= Value given in problem
= Formula/Calcu
Please answer all the questions in red based on the SPSS file. I have enclosed
a sample results section of how the teacher wants the last question (#5)
answered. Please include solutions in your usual format.
Solutions in word
SPSS output in word
SPSS. Sa
PROBLEM 11-1
Given
Available gas (MCF)
Price of Gas (today)
Gas Price Next Year
High
Low
Forward price for next year
Development cost per MCF
Debt (on the property)
Interest rate on debt
Debt maturity
Asking price for Equity
Risk free rate of interest
Inc
PROBLEM 4-1
Given
Solution Legend
Cost of debt
Tax Rate
Cost of equity
Debt/EV
6%
30%
14%
20%
= Value given in problem
= Formula/Calculation/Analysis required
= Qualitative analysis or Short answer required
= Goal Seek or Solver cell
= Crystal Ball Input
PROBLEM 9-1
Solution Legend
Given
Discount rate
Year 5 multiple
Debt (0)
Year
1
2
3
4
5
15%
5
$400,000
Cash flows
$100,000
120,000
135,000
150,000
175,000
Solution
a. Enterprise Value
b. Equity Value
= Value given in problem
= Formula/Calculation/Analysis