Use the table for the question(s) below FCF Forecast (5 million) Year Sales Growth vs. Prior Year EBIT (10% of Sales) Less: Income Tax (37%) Less: Increase in NWC (12% of Change in Sales) Free Cash Flow 240 OA $6.64 OB. $17.28 O.C. $9.60 OD. $4.80 1 270 12.5% 27.00 (9.99) 3.6 13.41 290 7.4% 29.00 10.73 24. 15.87 3 310 6.9% 31.00 11.47 24. 17.13 325.5 5.0% 32.56 12.44 18.65 Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to an industry growth rate of 4% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. If Banco industries has a weighted average cost of capital of 12%, $30 million in cash, $60 million in debt, and 18 million shares outstanding, which of the following is the best estimate of Banco's stock price at the start of year 17

Use the table for the question(s) below FCF Forecast (5 million) Year Sales Growth vs. Prior Year EBIT (10% of Sales) Less: Income Tax (37%) Less: Increase in NWC (12% of Change in Sales) Free Cash Flow 240 OA $6.64 OB. $17.28 O.C. $9.60 OD. $4.80 1 270 12.5% 27.00 (9.99) 3.6 13.41 290 7.4% 29.00 10.73 24. 15.87 3 310 6.9% 31.00 11.47 24. 17.13 325.5 5.0% 32.56 12.44 18.65 Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to an industry growth rate of 4% in year 4. The spreadsheet above shows a simplified pro forma for Banco Industries. If Banco industries has a weighted average cost of capital of 12%, $30 million in cash, $60 million in debt, and 18 million shares outstanding, which of the following is the best estimate of Banco's stock price at the start of year 17

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

Problem 1PS

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Right Answer?
The following table shows CLV for A company. What is the CLV of the first year (please round it up)? Profit per Annual Customer Annual Year CustomerRetention Accounts Discount Discount ($) Probability RemainingRate 0 1 50 2 70 3 ↑ 75 41 42 43 44 45 90% 87% 85% 100 90 78.3 66.5 0.1 0.1 Cumulative Discounted Cash Flow ($)0 0.1 Factor 0.91 0.83 0.75
Calculating OCF (LO3) Fergus Inc. has sales of $39,500, costs of $18,400, depreciation expense of $1,900, and interest expense of $1,400. If the tax rate is 35%, what is the operating cash flow, or OCF?
Year Net Cash Flow Discount Factor Present Value (using the factor) Present Value (using Excel formula) 0 $ (3,500,000.00) 1 $(3,500,000.00) ($3,500,000.00) 1 $900,000.00 0.90909 $818, 181.00 $818, 181.82 2 $ 900,000.00 0.82645 $743,805.00 $743, 801.65 3 $900,000.00 0.75131 $676, 179.00 $676, 183.32 4 $ 900,000.00 0.68301 $614,709.00 $614,712.11 5 $900,000.00 0.62092 $558, 828.00 $558,829.19 Net Present Value $(88,298.00) $(88,291.91) 3. Now assume that inflation is estimated as a 5% increase each year (starting with Year 1) for the entire 5 years. Calculate the new net cash flow values for each year. Hint: You should start with 5% increase for Year 1 net cash flow.
For a firm facing a marginal income tax rate of 35%, what is the after-tax cash flow effect of: (a) a $1,900 increase in contribution margin during the year, and (b) a $800 increase in cash operating expenses? (Do not round intermediate calculations.) (a) Effect on after-tax cash flow to contribution margin (b) Effect on after-tax cash flow to cash operating expenses
What is the discount rate at which the following cash flows have a NPV of $0? Answer in %, rounding to 2 decimals.Year 0 cash flow = -116,000Year 1 cash flow = 28,000Year 2 cash flow = 43,000Year 3 cash flow = 38,000Year 4 cash flow = 41,000Year 5 cash flow = 40,000Year 6 cash flow = 37,000
Given: Cash transactions as shown in cash flow diagram. %24 g = 4%/yr (positive transactions decreases from year to year) i = 10% per year 1 3 4. 5 7 12 13 14 15 Yrs g = 5%/yr (negative transactions become more negative) Required: (i) The net equivalent value at year 0 (Po)
Year Net Cash Flow Discount Factor Present Value (using the factor) Present Value (using Excel formula) 0 $ (3,500,000.00) 1 $ (3,500,000.00) ($3,500,000.00) 1 $ 900,000.00 0.90909 $ 818,181.00 $818,181.82 2 $ 900,000.00 0.82645 $ 743,805.00 $743,801.65 3 $ 900,000.00 0.75131 $ 676,179.00 $676,183.32 4 $ 900,000.00 0.68301 $ 614,709.00 $614,712.11 5 $ 900,000.00 0.62092 $ 558,828.00 $558,829.19 Net Present Value $ (88,298.00) $ (88,291.91) 3. Now assume that inflation is estimated as a 5% increase each year (starting with Year 1) for the entire 5 years. Calculate the new net cash flow values for each year. start with 5% increase for Year 1 net cash flow. Year Net Cash Flow 0 $…
(B) Based on the following information, how much does the company need in external funds for the upcoming fiscal year? The company has Sales $ 5,700, Costs 4,200, Current assets 3,900, Fixed assets 8,100, Current liabilities 2,200, Long-term debt 3,750, and Equity 6,050. Sales increase 15% for the upcoming fiscal year. Payout ratio is 40% and Tax rate is 34%.
Given the following information calculate the relevant annual Net Cash Flow After Tax [NCFAT], needed to calculate NPV. Forecast Annual Income $ Cash Revenue 360,000 Less Cash Operating Expenses 160,000 Admin Cash Flow Expenditure 60,000 Depreciation 36,000 Interest 24,000 Net Profit Before Tax Tax @30% 24,000 Net Profit After Tax 56,000
A firm has sales of $96,400, costs of $53,800, interest paid of $2,800, and depreciation of $7,100. The tax rate is 34 percent. What is the value of the cash coverage ratio? ○ Al 1727 B) 1521 12.68 D) 12.14 0日 23.41

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