2. Sisyphus Corp. has projected that their performance for the next five years result to the following: Cash Operating Expenses 30 33.00 36.30 39.93 43.92 ΥEAR Revenue 50 55.00 60.50 66.55 73.21 1 2 3 4. 5 Terminal value was assumed based on the growth rate of the cash flows. Annual Capital investment requirement is at P2 million. Income Tax rate is at 30%. The required rate or return for their business is 14%. Requirement: a. Compute for the growth rate b. How much is the Terminal Value? c. How much is the Free Cash Flow for years 1-5? d. How much is the Discounted Net Cash Flows to the Firm for years 1-5?
2. Sisyphus Corp. has projected that their performance for the next five years result to the following: Cash Operating Expenses 30 33.00 36.30 39.93 43.92 ΥEAR Revenue 50 55.00 60.50 66.55 73.21 1 2 3 4. 5 Terminal value was assumed based on the growth rate of the cash flows. Annual Capital investment requirement is at P2 million. Income Tax rate is at 30%. The required rate or return for their business is 14%. Requirement: a. Compute for the growth rate b. How much is the Terminal Value? c. How much is the Free Cash Flow for years 1-5? d. How much is the Discounted Net Cash Flows to the Firm for years 1-5?
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter21: Dynamic Capital Structures And Corporate Valuation
Section: Chapter Questions
Problem 9P
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