Sisyphus Corp. has projected that their performance for the next five years result to the following: YEAR Revenue Cash Operating Expenses 50 55.00 30 2 33.00 3 60.50 36.30 4. 66.55 39.93 5 73.21 43.92 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?

Sisyphus Corp. has projected that their performance for the next five years result to the following: YEAR Revenue Cash Operating Expenses 50 55.00 30 2 33.00 3 60.50 36.30 4. 66.55 39.93 5 73.21 43.92 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

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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