A Credit Suisse First Boston financial analyst is evaluating Relant home furnishings by using FCF valuation with EBIT. He has accumulated the following information as of 2016: . Current Sales is $5,000 million, COGS is 50% of Sales .Net non-cash charge is fixed at 10% of Sales . Corporate tax rate is 21% . Investment in Fixed Capital (FC)= 30% of Increase in Sales • Investment in Working Capital (WC)=10% of Increase in Sales . Sales growth rate forecasts=25% for five years . FCF grows by 5% annual after five years . WACC=10% Please estimate Terminal value of FCF (in $millions) in the year 2021 using FCF/EBIT valuation model. O $73,537.34 O $82,882.52 O $101,324.34 O $107,666.02 $108.982.34 None of the above:
A Credit Suisse First Boston financial analyst is evaluating Relant home furnishings by using FCF valuation with EBIT. He has accumulated the following information as of 2016: . Current Sales is $5,000 million, COGS is 50% of Sales .Net non-cash charge is fixed at 10% of Sales . Corporate tax rate is 21% . Investment in Fixed Capital (FC)= 30% of Increase in Sales • Investment in Working Capital (WC)=10% of Increase in Sales . Sales growth rate forecasts=25% for five years . FCF grows by 5% annual after five years . WACC=10% Please estimate Terminal value of FCF (in $millions) in the year 2021 using FCF/EBIT valuation model. O $73,537.34 O $82,882.52 O $101,324.34 O $107,666.02 $108.982.34 None of the above:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:A Credit Suisse First Boston financial analyst is evaluating Relant home furnishings by using FCF valuation with EBIT. He has
accumulated the following information as of 2016:
Current Sales is $5,000 million, COGS is 50% of Sales
• Net non-cash charge is fixed at 10% of Sales
Corporate tax rate is 21%
• Investment in Fixed Capital(FC)= 30% of Increase in Sales
• Investment in Working Capital(WC)=10% of Increase in Sales
• Sales growth rate forecasts=25% for five years
FCF grows by 5% annual after five years
• WACC=10%
Please estimate Terminal value of FCF (in $millions) in the year 2021 using FCF/EBIT valuation model.
O $73,537.34
O $82,882.52
O $101,324.34
০ $107,666.02
$108.982.34
None of the above
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