Answered: 1 2 3 4 NET SALES 145,404 120,620…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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North-Ireland Cooling’s management has made the projections shown in Table below. Use this table as a starting point to value the company. The WACC for North-Ireland Cooling is 10% and the long-run growth rate after year 4 is 7%. The company has $15,000 debt and 850 shares outstanding. Tax rate is 0.30.

a) Calculate the free cash flows to the firm

b) What is the firm value?

c) What is the equity value?

d) What is the intrinsic value of share?

Show your steps in your calculations.

Please answer as soon as possible

1
3
4
NET SALES
145,404
120,620
113,380
119,928
(Cost of goods sold)
86,712
70,240
65,836
62,524
(Other costs)
27,188
20,312
18,712
19,948
(Depreciation)
23,560
22,680
23,632
24,428
ЕBIT
7,944
7,388
5,200
13,028
(Tax at 0.30)
NOPAT
Depreciation
OCF
(A NWC)
216
1,368
980
508
(Δ FA)
25,380
21,592
21,880
25,680
FCFF

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