We want to understand the relationship between sales growth rates (s) and project FCF growthrates (g).This is useful to think about, because in our spreadsheet models we often need an estimateof g but when we look for analyst forecasts, they often just apply to s.We consider a hypothetical firm in which there are Sales, COGS, Depreciation, Taxes, ONWC,and CAPEX occurring each year.You know that sales growth is constant and equals s.You further know that in any given year, COGS/Sales-c, the tax rate is p, the ratio of ONWC toSales is n, and CAPEX-Depreciation, and Depreciation/Sales-d. s, c, p, n, and d are constants(i.e., fixed parameters that don't change over time).Perform an algebraic series of calculations. Start with FCF = (Sales - COGS - DA - Taxes -etc). Simplify the expression until it is in the form Sales. *((1-c-d)(1-p)-s/(1+s)*n).

To find the relationship between sales growth rates (s) and project Free Cash Flow (FCF) growth…

Answered: We want to understand the relationship…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

See similar textbooks

Similar questions

Total DVD and Blu-ray disc sales in 2009 were $8.72 billion. For the purposes of this problem, you will combine DVD and Blue-ray disk sales into one category of DVD sales. A study by In-Stat predicted that "physical disc sales will decline by $4.7 billion by 2014," and that "streaming, on the other hand, should grow from its current $2.2 billion to $6.3 billion over the same time period (2009–2014). d. Write an equation that represents the linear model for streaming videos. Let S = the total sales of streaming videos in billions of dollars, and t = the number of years after 2009. e. In what year do the models predict streaming video sales to exceed DVD sales?
Suppose you are the marketing manager of a firm, and you plan to introduce a new product to the market. You have to estimate the first year net profit, which depends on several variables • Sales volume (in units) • Price per unit • Unit cost . Fixed costs Your net profit is net profit = sales volume x (price per unit-unit cost) - fixed cost The fixed cost is $120, 000, but other factors have some uncertainty. Based on your market research, there are equal chance that the market will be slow, ok, or hot. • Slow market the sales volume follows Poisson distribution with mean 50,000 units product, and the average price per unit is $11.00 ● Ok market the sales volume follows Poisson distribution with mean 75,000 units product, the average price per unit is $10.00 Hot market: the sales volume follows Poisson distribution with mean 100,000 units product, but the competition is severe so you expect the average price per unit is just $8.00 No matter what the market type is, your average unit…
The Jersey Dairy Products Company produces cheese, which it sells to supermarkets and foodprocessing companies. Because of concerns about cholesterol and fat in cheese, the company has seen demand for its products decline during the past decade. It is now considering introducing some alternative low-fat dairy products and wants to determine how much available plant capacity it will have next year. The company has developed an exponential smoothing forecast with a = .40 to forecast cheese demand. The actual demand and the forecasts from the model are as follows:Assess the accuracy of the forecast model by using MAD and cumulative error. If the exponential smoothing forecast model does not appear to be accurate, determine whether a linear trend model would provide a more accurate forecast.
Eloise needs to finish a 516-page report on international trade so she can present it at the big conference this weekend. She's been tracking her page count at the end of each business day to see if she's on track. Use Excel to fit a trendline to Eloise's data to create a model of her productivity. According to your model, will Eloise be able to finish her report by the end of the day next Friday? Assume she works only on weekdays. Day Pages Monday 425 Tuesday 431 Wednesday 449 Thursday 464 Friday 471 A: Use Excel to fit a trendline to Eloise's data. What are the slope and intercept for this line? The slope is The intercept is B: Use your model (trendline) to answer the question. Will Eloise finish her report by the end of next friday? Yes
Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Y Time: 1 2 3 4 Cash flow: -$8,000 $3,350 $4,180 $1,520 $300
Ten years ago, the town of Easton decided to increase its annual spending on education so that its high school graduates would be able to earn higher wages. Now Easton has asked you to evaluate the effectiveness of the spending increase. Their data show that before the spending increase, the average annual salary of recent high school graduates was $25,000 and that now that average salary has risen to $28,500. Fortunately for your analysis, a neighboring community (Allentown) did not change its annual spending on education. Ten years ago, recent Allentown high school graduates earned an average of $22,500, and now that average is $23,750. (a) Use a difference-in-differences estimator to determine whether Easton’s spending increase caused the wages of their high school graduates to increase. please provide an accurate answer.
Two competing companies produce mobile phones. Company A starts production at 1000 phones per week and plans to increase output by 200 each week. Company B starts production with 500 phones per week and plans to increase output by 20% each week. (a) Calculate the weekly production in weeks 1; 5; 10; 15. Plot the graph of weekly output for each producer on the same diagram (use Excel, if available). Estimate the week in which the output is the same for both firms. (b) Calculate the total production during the first 15 weeks for each firm.
Table 1. The manager of Carpet City outlet store needs to be able to forecast accurately demand for Soft Shang carpet. Demand for the past 20 weeks appears in table 1 below. week Demand Forecast Error ABS. Dev Squared Error APE 1 20 2 28 3 22 4 18 5 22 6 22 7 22 8 26 9 23 10 23 11 23 12 27 13 25 14 22 15 23 16 14 17 14 18 15 19 11 20 16 21 22 23 24…
Price elasticity of demand (supply) or simply elasticity of demand (supply) measures the relative or percentage variation experienced by the quantity demanded (supplied) as a consequence of a change in the price of one percent (1%); In other words, it measures the intensity with which buyers (sellers) respond to a change in the priceprice. Elasticity is often used with respect to the price-demand relationship or the price-supply relationship, but the applicability of this concept is not restricted to that single case, but is broader, since the elasticity is calculated in percentages, since it is the only way to obtain a common unit of measure. When calculating the elasticity in arelationship, the units of measurement are maintained, therefore, they do not measure a proportional change, but a propensity, such as the well-known propensit to Keynesian consumption. The rate at which the selling price changes and from a product, with respect to its supply "x", is given by the following…
3. (5.7.12) On June 2, 2010 USA Today reported a story from Bloomberg News that said that the total price tag for the project to build the new F-35 Joint Strike Fighter would be 65% higher than the original $232 billion estimate. The cost now is estimated to be $382 billion. The total cost of each plane would be $112.4 million, up 81% from the original $62 million. The cost to produce each plane would be $92.4 million, about 85% higher than the original estimate of $50 million. a. Check the arithmetic to see that the three percentage increases reported are correct. b. Can you explain how the project cost can have increased by just 65% when the overall total per plane increased by 81% and the construction cost alone increased by almost 85%?
An entrepreneur who owns and operates two businesses (A and B) would like to analyze their profitability. They would like your help in the analysis. They give you the annual net profit (in thousands of $) for each business from 2008-2020. Table 1: Annual Net Profits for Businesses A and B Business Year Profit Business Year Profit 2008 -50 2008 -10 2009 57 2009 30 2010 71 2010 27 2011 64 2011 22 2012 60 2012 21 2013 50 2013 20 A 2014 41 2014 24 2015 59 2015 24 2016 71 2016 32 2017 71 2017 36 2018 74 2018 37 019 81 20 40 2020 97 2020 49 a. Suppose you want to graph the distribution of profits. Explain why using only one stem- plot might not be optimal for the analysis. b. Describe the correct stemplot to use. Generate this stemplot. Explain your steps. What can you say about the distribution from this stemplot? c. When are stemplots useful? And why is that? d. Suppose that instead of having 26 observations you have 200 observations. What graph should you generate? e. What other type of…

Recommended textbooks for you

MATLAB: An Introduction with Applications

Statistics

ISBN:

9781119256830

Author:

Amos Gilat

Publisher:

John Wiley & Sons Inc

Probability and Statistics for Engineering and th…

Statistics

ISBN:

9781305251809

Author:

Jay L. Devore

Publisher:

Cengage Learning

Statistics for The Behavioral Sciences (MindTap C…

Statistics

ISBN:

9781305504912

Author:

Frederick J Gravetter, Larry B. Wallnau

Publisher:

Cengage Learning

MATLAB: An Introduction with Applications

Statistics

ISBN:

9781119256830

Author:

Amos Gilat

Publisher:

John Wiley & Sons Inc

Probability and Statistics for Engineering and th…

Statistics

ISBN:

9781305251809

Author:

Jay L. Devore

Publisher:

Cengage Learning

Statistics for The Behavioral Sciences (MindTap C…

Statistics

ISBN:

9781305504912

Author:

Frederick J Gravetter, Larry B. Wallnau

Publisher:

Cengage Learning

Elementary Statistics: Picturing the World (7th E…

Statistics

ISBN:

9780134683416

Author:

Ron Larson, Betsy Farber

Publisher:

PEARSON

The Basic Practice of Statistics

Statistics

ISBN:

9781319042578

Author:

David S. Moore, William I. Notz, Michael A. Fligner

Publisher:

W. H. Freeman

Introduction to the Practice of Statistics

Statistics

ISBN:

9781319013387

Author:

David S. Moore, George P. McCabe, Bruce A. Craig

Publisher:

W. H. Freeman

SEE MORE TEXTBOOKS